… and the orchestra plays on

What is up in the second charge mortgage and car finance market?

New figures from the FLA this week show new business fell by 40% YOY in January and t was a similar situation in the consumer car finance market, 35% down. Even in mortgages more generally, households seem to be paying down by record amounts too.

With the pandemic situation now passing a year, it really does appears as if this latest lockdown has been different. It has certainly felt different, but now the data is showing how were are normalizing this more and more.

A good example is car sales. In the first lockdown, sales were up. We all seemed to need cars to avoid public transport. Many people also took advantage of stamp duty holidays, moving out of the city partly to avoid COVID, driving the property market too.

This time around on lockdown, there is less need for change. In fact, for many, it clearly seems a good opportunity to pay down debt.

However, government economic support is also starting to recede. What about those who are more impacted and find themselves at risk of financial difficulty? We seem to hear less about this recently too.

Employment in fact has started to tickup (currently 5.1%), albeit less than previous peaks in the last financial crisis, the 80’s and 90’s.

With 4.7million people still on furlough support in the UK, you wonder how much this support is helping with these figures. Without furlough another 7+% could quickly be added to the unemployment rate, taking it to historic highs. (Indeed the unemployment rate does appear to have trended up the last few months).

With the furlough scheme now extended until July and September, we still have some time, and hopefully the economy will roar back to life as quickly as lockdown started.

However, I cannot shake a sense of us seemingly slowly, having to pick our way through an increasingly dense iceberg field in the fog. Silent but dangerous, all may seem quiet but still time to prepare and get ready.

… and the orchestra plays on

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