United Kingdom23 Feb 2015
The aim of this Asset Finance International country survey is to provide a broad and balanced overview of the asset and auto finance markets in the UK, the factors and challenges that affect them and the trends for 2015. Some of the key areas covered and principal findings include:
- The latest figures from the Finance & Leasing Association (FLA) show that the rate of growth in 2014 for new business was up 13% year-on-year compared to 2013. This is the strongest annual rate of growth rate since the onset of the financial crisis.
- The £25 billion mark (US$41 billion) total for new business volumes (NBV) was surpassed for the first time since 2009; this landmark should be reached in 2015 through new business in the core market of deals of up to £20 million.
- In the 12-month period to December 2014, the three dominant sectors were car finance, commercial vehicle finance and plant and machinery (P&M) finance. Of these three sectors, growth was strongest in P&M (+21%), with car finance on +13% and commercial vehicles +12%.
The UK has the sixth largest economy in the world, but its asset finance market is estimated to be ranked higher than that. It is most likely now fourth largest, after the US, China and Japan, and having overtaken Germany which has for long been the leading European market.
The rise to Europe’s largest market is indicated in the most recent figures provided by Leaseurope, which show that in the first half of 2014, new business volume (NBV) for equipment and vehicle finance (excluding real estate) in the UK totaled €27.8 billion1 (US$38.1 billion at the average exchange rate for the period) compared with €23.5 billion ($32.2 billion) in Germany. It is highly unlikely that this will have been reversed in the second half of the year. According to Leaseurope, compared with the same period a year earlier the UK market rose at a rate only surpassed in Western Europe by Spain and Portugal – both of which were coming back off a steep decline.