Consumer credit lending sees small increase in January

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.

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.

Commenting on the statistics and the Government’s timetable 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.”