Second charge business down 70 per cent in April

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  • 08/06/2020
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Second charge business down 70 per cent in April
Just £32m of second charge lending was completed in April as the full extent of the coronavirus crisis on the market is revealed.

 

The figure is 68 per cent lower than a year earlier and the month saw just 685 agreements completed, also down 69 per cent from April 2019.

It also dragged down the figures for the three months to April by 24 per cent to £232m from 5,170 deals, figures from the Finance and leasing Association (FLA) showed.

The second charge market had been enjoying a period of prolonged growth over the last year, which was reflected in the annual total of £1.2bn worth of loans still being six per cent higher than in the 12 months to April 2019.

FLA head of consumer and mortgage finance Fiona Hoyle (pictured) said: “The second charge mortgage market continued to suffer from the closure of the housing market during the lockdown in April.

“As restrictions are lifted, FLA’s second charge mortgage members are ready to support new demand and continue to provide the necessary forbearance customers require.

“Lenders are continuing to do all they can to support customers during this challenging period and customers experiencing payment difficulties should contact their lender as soon as possible.”

 

Car finance falls 94 per cent

Similar sharp falls were seen across the consumer finance space, with the car finance market almost entirely shutdown.

Only £185m of car finance credit was agreed in April, down 94 per cent from April 2019.

Credit card and personal loan use halved to £2.2bn while retail and online credit demand dropped 30 per cent to £484m.

FLA chief economist and head of research Geraldine Kilkelly noted that online purchases reached a record-high of 30 per cent of retail sales in April, which stemmed the impact of the lockdown on the retail store and online credit sector.

And she repeated the trade body’s call for government intervention to support the sector.

“With much of the retail sector reopening during June, the FLA urges the government and Bank of England to take immediate action to extend financial support schemes to all lenders, including non-banks, so that they can meet the huge ongoing demand for forbearance and the pent-up demand for new lending,” Kilkelly added.

 

 

 

 

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