United Kingdom Consumer Credit Market, Forecast to 2023 - An Analysis of both Supply and Demand Drivers - ResearchAndMarkets.com

The "UK Consumer Credit: Forecasts and Future Opportunities to 2023" report has been added to ResearchAndMarkets.com's offering.

The UK consumer credit market experienced challenging conditions in 2019. Lending in 2020 is set to rise by 5%, but overall growth will remain flat at around 4-5% throughout the rest of the forecast period. This means gross advances are expected to total 372.4bn by 2023.

This report offers five-year gross lending forecasts for the consumer credit market up to 2023. It offers insight into the key macroeconomic, regulatory, and other factors that will drive demand and supply over the next five years. It also provides an outlook for total consumer credit including overdrafts, P2P lending, motor finance, payday lending, home credit, credit cards, and retail finance.

The following factors will drive the market over the next few years:

Supply side: Stricter lending criteria, high incidences of bad debts, and the Prudential Regulation Authority's intent to impose a more stringent regulatory regime - together with a cautious approach towards unsecured lending among providers - will curtail the credit supply growth rate over the forecast period.

Demand side: Demand for credit will likely hold due to the slow pace of economic growth, high levels of existing household debt, and low levels of productivity on the macroeconomic front. Weak retail sales, which reflect consumers' reluctance to spend, will also adversely impact the appetite for lending.

Key Highlights

• Overdrafts will be in decline as the Financial Conduct Authority encourages banks to reform their overdraft practices and customers adjust their spending habits to avoid high-cost borrowing lines.
• Motor finance sector growth contracted, falling to 3.1% in 2019. New car sales are decreasing, and the excess of vehicles that will enter the used car market over the next few years will bring down prices.
• The payday lending sector suffered a huge contraction due to tougher regulation, including strict price caps and comprehensive affordability checks. This resulted in several lenders exiting the industry.

Reasons to Buy

• Develop more targeted strategies through the analysis of key consumer credit market developments.
• Inform your future plans with our five-year forecast of gross advances for all credit lines.
• Analyze trends with details of historic gross advances across a range of credit lines.
• Benchmark yourself against competitors and ensure you remain competitive as new innovations begin to enter the market.
• Be prepared for how regulation will impact the consumer credit market over the next few years.

Key Topics Covered

1. EXECUTIVE SUMMARY

1.1. The state of the UK consumer credit market

1.2. Prospects for niche sectors

1.3. Critical success factors

2. THE CONSUMER CREDIT MARKET SUFFERED CHALLENGING CONDITIONS IN 2019

2.1. Gross lending growth fell in 2019, but will recover over the forecast period

2.2. Consumer credit supply is expected to reduce further

2.2.1. Depressed supply is set to impact credit availability

2.2.2. The quality of new credit has improved over the last two years

2.2.3. Quarterly write-offs on other unsecured debt have surged while credit card debt write-offs remain high

2.2.4. The PRA is implementing a more stringent regulatory regime

2.3. Consumer demand for unsecured credit will be impacted

2.3.1. Credit providers reported a slump in demand for unsecured credit in Q4 2018

2.3.2. Macroeconomic factors also point towards moderate demand for credit

2.3.3. Weak retail sales reflect consumers' reluctance to spend

2.3.4. Tighter lending criteria and affordable personal loans are underpinning demand for credit

2.3.5. The steadily rising household debt-to-income ratio will impact demand for credit

2.3.6. Improving consumer confidence will support demand for credit

2.4. Lloyds Banking Group is the market leader in personal loans

3. FUTURE PERFORMANCE WILL VARY SIGNIFICANTLY BY SECTOR

3.1. P2P lending will be the fastest-growing sector

3.2. The proliferation of alternative payment methods will impact credit card lending

3.3. Growth in motor finance is set to slow over the forecast period

3.4. Regulatory interventions will shake up the overdraft market

3.5. Online and POS finance availability will support retail finance growth

3.6. Home credit lending will grow at a marginal rate

3.7. Payday lending will contract over the forecast period

3.8. P2P lending will witness sustainable growth over the next few years

4. INNOVATION

4.1. Creditspring offers interest-free loans

4.2. Tully provides digital debt management

4.3. Lendable provides quick and hassle-free loans

4.4. The Co-operative Bank opens loan marketplace in line with its ethical approach

4.5. Koyo aims to assist underbanked borrowers

4.6. SafetyNet offers flexible and convenient payday-style finance

Companies Mentioned

• Seguros El Roble
• Afianzadora G&T
• Aseguradora General
• Seguros Mapfre
• ASSA Compaa de Seguros

For more information about this report visit https://www.researchandmarkets.com/r/dano20

View source version on businesswire.com: https://www.businesswire.com/news/home/20200408005530/en/

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