The UK asset finance market has achieved growth for the first time in more than a year, according to new figures released by the Finance & Leasing Association (FLA).
In February, total asset finance new business reached £2.2 billion, marking a 1% rise on the previous year and a key milestone in the economic recovery following the pandemic.
Furthermore, in the 12 months up to February 2021, total asset finance was down 24% to £26 billion, showing the true impact of the pandemic on the UK asset finance landscape.
Plant and machinery finance fared the best during February this year with new business rising to £585 million, up 14% compared to the same month in 20s20. This was in stark contrast to the business equipment finance sector which saw a 24% decline in new business to £130 million.
| Feb 2021 | % change on prev. year | 12 months to Feb 2021 | % change on prev. year | |
|---|---|---|---|---|
|
Plant & machinery finance (£m) |
585 | 14 | 5,930 | -17 |
| Commercial vehicle finance (£m) | 623 | 8 | 6,988 | -23 |
| IT equipment finance (£m) | 167 | -20 | 2,378 | -17 |
| Business equipment finance (£m) | 130 | -24 | 1,673 | -27 |
| Car finance (£m) | 434 | -18 | 7,048 | -29 |
When looking at the FLA’s figurework by channel, all sales channels were down. Broker-introduced finance was responsible for £476 million, equalling an 8% decline on the previous year.
Similarly, direct finance was used for £944 million of new business, marking a 1% decline on the previous year.
| Feb 2021 | % change on prev. year | 12 months to Feb 2021 | % change on prev. year | |
|---|---|---|---|---|
| Direct finance (£m) | 44 | -1 | 11,993 | -27 |
|
Broker-introduced finance (£m) |
476 | -8 | 5,313 | -22 |
| Sales finance (£m) | 585 | -6 | 7,848 | -18 |
Geraldine Kilkelly, director of research and chief economist at the FLA, said: “While the FLA welcomes the measures announced in the budget to ensure that a strong pick-up in business investment is part of the UK economic recovery, we urge the government to extend the super-deduction allowance for expenditure on qualifying plant and machinery to include leasing.”
Additional data from the Society of Motor Manufacturers and Traders (SMMT) shows that new car registrations in March had grown for the first time since August 2020. They hit an additional 29,280 vehicles in the month, marking a rise of 11.5% on the previous year.
To find out more about how the UK consumer car finance market is faring in the first quarter of 2021, click here: https://www.assetfinanceinternational.com/index.php/auto-finance/auto-emea/auto-emea-articles/20133-new-car-registrations-rise-by-11-5-in-march-despite-27-drop-in-consumer-car-finance-in-february
