Figures released today by the Finance & Leasing Association (FLA) show that asset finance new business (primarily leasing and hire purchase) fell in June by 3% compared with the same month in 2017, but grew by 5% in the second quarter of 2018 overall.
The commercial vehicle finance and IT equipment finance sectors reported new business up year-on-year by 9% and 15% respectively in the second quarter of 2018.
By asset, significant drops were recorded in plant and machinery finance, and car finance. Plant and machinery was down 15% year-on-year to £622m worth provided in June, with car finance down 10% to £827m for the same time period.
By channel, direct finance was at £1.4bn, down 7% year-on-year. Broker introduced finance was up 14% to £519m, and sales finance was down 6% to £922m.
By product, the greatest drop was in operational leasing, down 19% year-on-year to £522m for the month of June. Finance leasing was also down, falling 4% year-on-year to £367m. Improvements were to be found in lease and hire purchase, up 6% to £1.68bn. Uncategorized forms of finance were also down, dipping by 21% to £332m for June.
Overall year-on-year figures for the twelve months to June 2018 still show an improvement. Total FLA asset finance for this period was £31.8bn, a 1% rise. The total excluding high value finance deals was a 2% rise. Year-on-year the biggest rise was by channel in broker-introduced finance, which in the twelve months time frame was up by 8%.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: “The asset finance market reported new business up in the first half of 2018 by 1% compared with the same period a year earlier. This was in line with modest growth in UK business investment over the same period.”
Last month’s FLA figures showed that asset finance new business (primarily leasing and hire purchase) grew by 10% in May, compared with the same month in 2017.