Car finance new business rose 17% year-on-year by value to £1.77bn in October 2013, above the total consumer finance new business rise of 5% (to £5.40bn), according to the Finance & Leasing Association (FLA).

For the three-month period to the end of October, total consumer finance was up 8% to £16.48bn and car finance up 24% to £5.89bn; for the 12-month period, total consumer finance was up 5% to £61.42bn and car finance up 24% (again) to £20.19bn.

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Although starting from a lower base, the biggest year-on-year gains were seen in the second mortgage market, up 42% for the month, 29% for the three months and 31% for the year-to-date. With 1,391 agreements signed, the market was up 25% by volume for the month to its highest level in nearly four years.

Transitional, essential

Fiona Hoyle, head of consumer finance at the FLA, took the opportunity to remind the Financial Conduct Authority (FCA) of the concern that the rapid transfer of regulatory powers to it from the Office of Fair Trading may hamper the consumer credit market.

"Today’s figures show a continued demand for responsibly-provided credit and maintaining the supply of credit has got to be a priority for the FCA as it finalises its new regulatory regime," said Hoyle. "The FLA has called for a sensible and proportionate approach – one which recognises the extremely short timeframe that firms have to implement wide-ranging changes.

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"With only four months to go before the new regime is introduced, and the final rulebook not due for publication until the end of February, sensible transitional arrangements are going to be essential."

The FLA has previously spoken of the quick pace of change and the possibility that companies may have to exit the market. However, the FCA has said it was ‘confident’ in its timetable and, speaking at the Consumer Credit Trade Association conference in November, Nadege Genetay, head of banking, lending and protection policy at the FCA, said it was not the intention of the Authority to constrict the supply of credit.

richard.brown@timetric.com