Figures released by the Finance & Leasing Association (FLA) show that total asset finance new business – primarily leasing and hire purchase – grew in April 2024 by 31% compared with the same month in 2023.
In the first four months of 2024, new business was 7% higher than in the same period in 2023.
The business new car finance and commercial vehicle finance sectors reported new business up in April by 35% and 45% respectively, compared with the same month in 2023.
New business in the plant and machinery finance and business equipment finance sectors increased by 9% and 4% respectively.
Geraldine Kilkelly, director of research and chief economist at the FLA, said: “The strong performance by the asset finance market in April can in part be attributed to a shorter working month in April 2023 due to the timing of Easter.
“The vehicle finance sectors have continued to drive growth this year with new business up by 15% in the first four months of 2024.
“By contrast, the machinery and equipment finance sectors reported new business 9% lower over the same period.
“Key to any new Government initiatives to boost long-term economic growth will be increasing business investment.
“The asset finance industry which has funded as much as 40% of UK investment in machinery, equipment and vehicles will play a pivotal role in supporting the drive among businesses of all sizes to achieve growth and higher productivity sustainably.”
The FLA also found that consumer finance new business grew in April 2024 by 9% compared with the same month in 2023.
In the first four months of 2024, new business in this market increased by 2% compared with the same period in 2023.
The credit card and personal loans sectors together reported new business 11% higher in April compared with the same month in 2023, while the retail store and online credit sector reported a fall in new business of 3% over the same period.
Kilkelly said: “The strong performance in April can in part be attributed to a shorter working month in April 2023 due to the timing of Easter.
“There has also been a significant improvement in consumer confidence with better news on inflation and the prospect of lower interest rates leading to greater optimism about personal finances.
“The General Election campaigns are in full swing but for many households the key to maintaining confidence will be a reduction in interest rates in the second half of 2024.
“Our latest research suggested that the UK consumer credit market would see single-digit growth in the value of new business in 2024 of around 4% compared with 2023.
“As always, customers who are worried about meeting payments should speak to their lender as soon as possible to find a solution.”
