Leasing reaches highest level since credit crunch

Robyn Hall

October 23, 2012

FLA members financed 31.4% of UK fixed capital investment in the second quarter of 2012.

The asset finance market has grown in each month so far in 2012.

In August, the market for deals up to £20 million in size grew by 6%, to almost £1.5bn. In the eight months to August 2012, this market has grown by 9%, to £13.6bn.

The strongest growth was reported by the IT equipment finance sector, with new business of £102m in August, up by 35% compared with the same period a year earlier.

Plant and machinery finance grew by 8% over the same period, to £350m. Following strong growth in the second half of 2011, commercial vehicle finance was 7% lower than in August 2011, at £310m.

Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The asset finance industry has reported growth in its core markets in each month for more than a year, while the Bank of England’s published figures for gross lending to businesses have fallen over the same period. As a result, leasing now accounts for the highest proportion of fixed capital investment in almost four years.

“Over the last year, UK businesses have invested in a wide range of assets using leasing.

“A recovery in the commercial vehicle market in 2011 has been followed by strong growth in the plant and machinery and IT equipment finance sectors.

“Asset finance providers currently expect modest further growth over the next year.”

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