UK Asset Finance Market Sees Strong Finish to 2024 with 7% Growth in December
The UK’s asset finance sector demonstrated notable resilience, concluding 2024 on a high note. New figures released by the Finance & Leasing Association (FLA) reveal that total asset finance new business, primarily comprising leasing and hire purchase agreements, experienced a 7% growth in December 2024 compared to the same month in the previous year. This positive momentum contributed to an overall annual growth of 3% for 2024, pushing the total new business value to a record £39.7 billion. This performance underscores the critical role asset finance plays in supporting UK business investment, financing approximately one-third of the nation’s investment in vehicles, machinery, and equipment throughout the year.
December 2024 Sees Strong Finish
- Overall new business in asset finance increased by 7% compared to December 2023.
- The commercial vehicle finance sector showed significant strength, with new business surging by 14% year-on-year.
- Plant and machinery finance also reported positive growth, up by 4% compared to December 2023.
- IT equipment finance saw a substantial increase, rising by 35% year-on-year.
- Financing for aircraft, ships, and rolling stock experienced a remarkable jump of 149% compared to the previous December.
- Conversely, the business new car finance sector saw a decline, with new business falling by 4% year-on-year.
- Business equipment finance experienced a modest decrease of 3%.
- Overall car finance within the asset finance category was down by 6% compared to December 2023.
Record Year for Asset Finance Despite Mixed Sector Performance
- The full year 2024 saw total asset finance new business grow by 3% compared to 2023, reaching a record annual value of £39.7 billion.
- Commercial vehicle finance was the standout performer for the year, recording the strongest growth at 10%.
- The business new car finance sector experienced a significant slowdown in growth over the year.
- Plant and machinery finance remained subdued throughout 2024, ending the year with a 2% decrease compared to 2023.
- IT equipment finance grew by 6% over the full year.
- Business equipment finance saw a decline of 10% in 2024.
- Car finance reported a modest annual increase of 1%.
- Financing for aircraft, ships, and rolling stock increased by 4% over the year.
- Support for businesses of all sizes continued, with new lending to SMEs growing by 1% to £23.5 billion, while lending to larger businesses increased by 6% to £14.5 billion in 2024.
Industry Insights and Future Outlook
Reflecting on the market’s performance, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, stated, “The asset finance market ended the year on a positive note which meant in 2024 overall new business grew by 3% to reach a record level of £39.7 billion.”
Kilkelly highlighted the varied performance across sectors: “Performances varied across the asset sectors last year. The commercial vehicle finance sector recorded the strongest growth of 10%. By contrast, the new car finance sector reported a significant slowdown in growth and the machinery and equipment finance sectors remained subdued.”
She also emphasized the industry’s continued support for business investment: “The industry continued to support investment by businesses of all sizes as new lending to SMEs grew by 1% to £23.5 billion, while new lending to larger businesses increased by 6% to £14.5 billion.”
Looking forward, the FLA underscores the sector’s importance in facilitating the transition to a net-zero economy. Kilkelly added, “The asset finance market supported the real economy by financing a third of UK investment in…[source](https://www.credit-connect.co.uk/news/asset-finance-new-business-grew-by-7-in-december-2024/) Spring Spending Review.”
Further details and statistics can be explored via the FLA’s latest asset finance statistics.
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