Forbearance requests to lenders surge to nearly 1.2 million

The Finance & Leasing Association (FLA) has demanded the government take action to support non-bank lenders “in days”, after forbearance requests to its members reached almost 1.2 million.

The trade body renewed its call to the government and the Bank of England to take urgent action, just as its own research revealed FLA members provided just over £138bn of new business in the year to March 2020. Of this total, £44bn was provided by non-bank lenders.

Stephen Haddrill, director general at the FLA, said: “The asset, consumer and motor finance markets have been hit hard by the measures taken to deal with the coronavirus crisis, with a 20 percent fall in new business in March alone.

“FLA members have also faced almost 1.2 million Covid-19 related requests for forbearance, of which 75 percent have already been granted. The industry is committed to supporting their customers during these exceptional times.

“Urgent action is needed – in days, not weeks – to deliver financial support to the non-bank lending sector to ensure that we maintain a financial services sector that is diverse, innovative and competitive.”

The trade body’s statistics for business volumes through March show the following:

• New business volumes in the consumer car finance market fell in March by 29 percent compared with the same month in 2019. Using the same year-on-year comparison, the consumer used car finance market reported a fall in new business volumes of 24 percent. The FLA’s said the consumer car finance market is likely to see the value of new business fall by 29 percent in 2020 as a whole.
• New business volumes for second charge mortgages in March fell 14 percent, by both value and volume, compared with March 2019.
• Consumer finance new business fell in March 2020 by 16 percent compared with the same month in 2019.
• Credit card and personal loan new business together fell in March 2020 by 10 percent compared with the same month in 2019, while retail store and online credit new business was six percent lower, compared to a year ago.