August saw 19% year-on-year fall in secured loans

Secured loan business dropped 19% in August compared with the same month in 2009, latest figures from the Finance & Leasing Association show.

Its members only did £22m worth of secured loans this August.

In the three months to August 2010 secured loan business totalled £70m – a drop of 15% on the previous year.

Overall, consumer credit business among FLA members was up 1% in August, compared with August 2009.

In the 2010 Budget, the government confirmed that it will move secured loans to the Financial Service Authority’s remit, away from the current regulator, the Office of Fair Trading.

Fiona Hoyle, head of consumer finance at the FLA, says: “Given the fragility of the credit markets and consumer spending, the government needs to ensure its review of consumer credit and personal insolvency does not make it harder for people to get credit.

“The consumer credit market is subdued, reflecting consumers’ cautious approach to spending.”