Small increase in consumer credit lending during January 2013

8 March 2013

New figures released today by the Finance & Leasing Association (FLA) show a small increase in consumer credit lending in January of 1% compared with the same month in 2012. Higher growth continued in car finance, second charge mortgages and store instalment credit, showing that the task of designing a new credit regulation regime which actively supports this diverse market is more important than ever.

Commenting on the statistics and the Government’s timetable (published this week) for writing a new set of rules for consumer credit, Stephen Sklaroff, Director General of the Finance & Leasing Association, said: “This market contributes £260bn to the UK economy annually. Millions of people rely on it for everything from the car in their driveway to the sofa they sit on each evening. Tens of thousands of high street stores, motor dealers, and the lenders which provide the credit, need a realistic timeframe in which to prepare for the new regulatory regime.

“The Government’s target of April 2014 seems very tight, given the huge amount of work still to be done.  A sensible transition period and a smooth process will be vital to maintain the current supply of credit to consumers and businesses.”

The second charge mortgage market reported its strongest performance since October last year. New second charge mortgage business grew in January 30% by value (to £30 million) and 14% by volume (to 992 new agreements) compared with the same month in the previous year.

Table 1: New consumer credit lending January 2013

  Jan 13 % change on prev. year 3 months to Jan 2013 % change on prev. year 12 months to Jan 2013 % change on prev. year
Total FLA consumer finance (£m) 4,166 +1 13,473 +3 54,971 +5
Data extracts:            
Store cards (£m) 91 -13 445 -14 1,452 -15
Credit cards & personal loans (£m) 2,491 -7 8,221 -4 32,212 -1
Store instalment credit (£m) 219 +4 729 +6 2,767 +16
Second mortgages (£m) 30 +30 84 +18 333 +16
Car finance (£m) 1,271 +20 3,718 +23 16,888 +22

Note to editors:

  1. New business reported by the credit card finance and personal loans market contracted in January by 7% to £2.5 billion. Part of the fall reported by these markets resulted from the sale of an active credit card portfolio to a company which is not a member of the FLA.
  2. FLA members in the consumer finance sector include banks, credit card providers, store card providers, second-charge mortgage lenders, motor finance providers, personal loan and short-term credit lenders, and instalment credit providers.
  3. In 2012 FLA members provided £76.3 billion of new finance to UK businesses and households. £54.9 billion of this was in the form of consumer credit, a third of all unsecured lending in the UK.

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