Latest figures from the Finance & Leasing Association (FLA) show growth of 6% in consumer finance new business in October, compared with the same month last year.
However, second charge mortgage new business decreased 15% by value and 22% by volume over the same period.
Credit card and personal loan new business together grew by 7% compared with October 2015, while retail store and online credit new business fell by 4%.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: “October was a quiet month for the second charge mortgage market as it continues to adapt to life under the Financial Conduct Authority’s mortgage regime. In the ten months to October 2016, this market reported new business up 5% by value and down 6% by volume.
“The FLA’s latest commissioned research of consumer lending forecasts by Oxford Economics suggests that new consumer credit in the UK will continue to grow in 2017 by around 1%. This compares to a growth forecast of almost 6% in 2016 as a whole.”
Harry Landy, sales director of Enterprise Finance, said: “The second charge mortgage market is holding fairly steady as we approach the end of the year. There is little doubt that 2016 will go down as one of great macro-economic volatility, with seismic shocks felt most notably through the UK’s decision to leave the EU and Donald Trump’s surprising victory in the US presidential election.
“Nevertheless, the market has fought back following the implementation of the MCD at the end of March and, as today’s figures show, remains buoyant. Although further economic jitters are likely in the New Year, the second charge mortgage market is in good overall health, with underlying growth in consumer demand boosting the sector. We are ready to end the year on a high and start 2017 with real optimism.”
