Second charge market rises 37pc
New figures released today by the Finance & Leasing Association also showed 8% growth in consumer finance new business in July compared with the same month last year.
Point-of-sale consumer car finance grew by 15% in the same period, while retail store and online credit was 4% higher than in July 2014.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: “July saw growth across the main consumer finance products.
“Over the past 12 months consumer finance provided by FLA members grew by 6%, which is line with our own research which suggests growth of between 7-8% in UK new consumer credit in 2015 as a whole.”
Research from Enterprise Finance also published today showed monthly secured lending hitting £85.5m in July.
According to the distributor monthly completions jumped by 14% from May to June, then improved by a further 2% in July.
The year-on-year improvement was even more marked, with 21% more second charge activity in July 2015 than in the equivalent month a year previously.
This means that the annual secured lending total stood at £849m for the year to July 2015, with the sector continuing to home in on the £1bn landmark.
Harry Landy, director of Enterprise Finance, said: “After a slight calming in May, the second charge market soared in June and July as consumer appetite for secured loans boomed.
“Second charge completions have followed a similar pattern to wider gross mortgage lending in that they’ve really kicked up a gear after holding fairly steady throughout the Spring.
“May’s figures were perhaps too early to capture the post-election feel-good factor, but the subsequent activity in June and July more accurately reflect the improving public sentiment.
“With almost £850m of second charge mortgages now being completed on an annual basis, it’s surely only a matter of time before we are talking about a £1bn-a-year industry.
“With public awareness of secured loans only set to be enhanced by the regulatory changes occurring in the spring when they come under the Mortgage Credit Directive, it would be no surprise if the sector surpassed this milestone at some point in 2016.”