Second-charge mortgage lending down by 20%
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Figures released today by the Finance and leasing Association show consumer borrowing levels in April remain lower than the same time last year, with secured lending down 20%.
The amount of credit granted was 9% lower than in April 2009.
Store card lending contracted by 14%, credit cards by 12%, store instalment credit by 19%, unsecured loans by 42% and second-charge mortgages by 20%.
The only exception was car finance provided through dealers, which was up by 15% in April compared with the year before.
The FLA’s figures suggest that consumers remain cautious about spending in the uncertain economic climate and with unemployment rising.
Prolonged uncertainty over whether responsibility for consumer credit regulation will be transferred from the Office of Fair Trading to the new Consumer Protection and Markets Agency, would risk making the market situation more difficult for lenders.
Fiona Hoyle, head of consumer finance at the FLA, says: “Consumer spending is vital to the economic recovery. Today’s figures show how fragile the consumer lending markets remain. The Government should help reduce uncertainty in the markets by clarifying its plans for consumer credit regulation.”
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