Asset finance new business (primarily leasing and hire purchase) in the UK fell by 6% in September, compared with the same month last year, according to new figures released by the Finance & Leasing Association (FLA).
For the whole of Q3 2017, new business fell by 2% compared with the same quarter in 2016.
While new finance for business equipment grew in September by 4% compared with the same month in 2016, there were falls for new finance for plant and machinery (-8%), car finance (-8%) and IT equipment finance (-4%). Commercial vehicle finance rose 1%.
However, despite the falls, new business for the 12 months to September is still up 6% year-on-year, excluding high value, driven by strong performances earlier in the period.
Geraldine Kilkelly, head of research and chief economist at the FLA, said: “September was a quieter month for the business car and plant and machinery finance sectors.
“Nevertheless, the asset finance market has returned a strong performance so far in 2017, with new business overall 6% higher than in the previous year. Over the same period, UK business investment is forecast to have grown by only 2.3%.”
FLA calculations show that the industry financed more than 35% of UK investment in machinery, equipment and purchased software in the 12 months to June 2017 - an eight-year high.
Asset finance new business
| Sep 17 |
% change on prev yr |
3 mths to Sep 17 |
% change on prev yr |
12 mths to Sep 17 |
% change on prev yr | |
|---|---|---|---|---|---|---|
| Total FLA asset finance (£m) | 2,750 | -6 | 7,574 | -2 | 31,611 | +5 |
| Total excluding high value (£m) | 2,740 | -2 | 7,381 | +3 | 30,579 | +6 |
| By asset: | ||||||
| Plant and machinery finance (£m) |
494 |
-8 | 1,537 | +5 | 6,505 | +12 |
| Commercial vehicle finance (£m) | 711 | +1 | 1,764 | -2 | 7,488 | +2 |
| IT equipment finance (£m) | 212 | -4 | 549 | -5 | 2,214 | -3 |
| Business equipment finance (£m) | 219 | +4 | 632 | +8 | 2,567 | +12 |
| Car finance (£m) | 888 | -8 | 2,396 | +2 | 9,763 | +5 |
| Aircraft, ships and rolling stock finance (£m) | 20 | +24 | 34 | -77 | 615 | +20 |
| By channel: | ||||||
| Direct finance (£m) | 1,283 | -5 | 3,711 | 0 | 15,506 | +4 |
| Broker-introduced finance (£m) | 520 | -4 | 1,423 | +3 | 5,723 | +12 |
| Sales finance (£m) | 937 | +3 | 2,248 | +6 | 9,350 | +6 |
| By product: | ||||||
| Finance leasing (£m) | 344 | -3 | 941 | 0 | 4,000 | -3 |
| Operating leasing (£m) | 655 | -6 | 1,658 | 0 | 7,063 | +6 |
| Lease/Hire purchase (£m) | 1,434 | -2 | 4,045 | +3 | 16,589 | +9 |
| Other finance (£m) | 316 | -24 | 930 | -21 | 3,959 | -4 |
