Lending in January shrank by 6% to £69m, compared to the same month last year.
Overall, consumer finance lending grew. In total, firms across the car finance, credit card and personal loans, second charge and store credit sectors lent £7bn in the month, a 10% year-on-year rise. Car finance lending rose by 12% with lending levels reaching £2.3bn in the month, while credit card and personal loans rose 11% to £3.9bn. Retail store and online credit was subdued with a 1% up tick year-on-year, with £451m advanced.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: “There was new business growth across most of the main consumer finance products in January, suggesting that consumer confidence remained relatively robust at the start of 2017.
“The latest research from Oxford Economics on behalf of the FLA shows that total new consumer credit in the UK is expected to grow by 1.4% in 2017 as a whole, a more modest rate than in recent years.”
The second charge sector has been vocal about its disappointment over lacklustre lending growth after the implementation of the Mortgage Credit Directive last year. Educating mortgage brokers about the opportunities second charge loans can offer their clients, has been top of its agenda.
In his latest blog for Specialist Lending Solutions, Steve Walker, managing director of Promise Specialist Lending, moves the debate on, raising the issue that brokers also need to understand the benefit second charges can offer to their own business levels.