Second charge mortgage deals down 18% in post-Brexit July, FLA

by: Carmen Reichman
  • 09/09/2016
  • 0
Second charge mortgage deals down 18% in post-Brexit July, FLA
Second charge mortgage business slumped 18% in July, the month following Brexit, compared with the same period last year, figures from the Finance & Leasing Association (FLA) have shown.

In total £73m worth of second charges were written by FLA members in the month, down 9% on last year. Numbers of new deals were down 18%.

However, the figures also showed deal values had remained constant over the three months to July, when £212m was transacted. Looking at the whole to July they had seen a rise of 19%, to £885m.

Specialist master broker Enterprise Finance had already detected a dip in lending activity in April compared with the previous year. However, the firm said it expected Britain’s decision to leave the European Union to lead to more people buying secured loans in a bid to consolidate other forms of debt.

Overall, consumer finance had stalled in July after a year of growth, the FLA found, with members transacting £6.7bn of new business in the month, same as in July 2015.

The FLA said new business had grown 10% in the first seven months of 2016, but had seen a quiet month in July.

Head of research and chief economist Geraldine Kilkenny said: “The FLA’s latest research carried out by Oxford Economics suggests that new UK consumer credit will be broadly stable in 2017. Maintaining consumer confidence will remain a key task for the government, the Bank of England and other public bodies in the coming months.”

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 instalment credit providers. In total they provided £110bn of new finance to UK businesses and households in 2015.

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