Growing membership of the NACFB is the reason for a hike in
broker sourced vehicle finance deals. However, asset finance deals
sourced from intermediaries are down.
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The number of vehicle finance deals sourced by UK leasing
brokers have soared well above expectations, while asset finance as
a whole has seen a marginal decline, according to latest figures
from the National Association of Commercial Finance Brokers
(NACFB).
The results (see side table) show a 46 per cent increase in new
business transacted during the year to reach a new total of
£19.3bn, compared with £13.3bn in 2006.
Leasing and asset finance figures showed a marginal decrease of
3 per cent over the previous year. The area of largest growth,
however, was in vehicle finance where the volume of business
transacted rose 339 per cent growth to reach £1.2bn, against £290m
in 2006.
The growth in vehicle deals is largely down to an increase in
the number of NACFB members specialising in this field. “Put
simply, we have a lot more brokers transacting vehicle finance than
we did 12 months ago,” said
Adam Tyler, the NACFB’s chief executive.
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By GlobalDataHowever, across the board there has been growth in NACFB
membership. “At some point during 2006 and 2007 we were receiving
one application for membership per working day,” said Tyler.
Nonetheless, the number of asset finance deals as a whole are
down.
Another trend to emerge from the latest figures is the rapid
diversification of broker business. According to the NACFB, over 14
per cent of brokers now write business outside their original
market niche. “These results don’t include brokers who have dipped
their toe in the water and just written the odd deal here and there
– these are brokers who write significant business,” said
Tyler.
He added: “Brokers are taking the holistic approach and writing
business across the entire market – commercial mortgage, leasing
and asset finance, vehicle finance and also some factoring and
invoice discounting as and when the client requires it.”
Buy-to-let mortgages saw one of the biggest increases, rising
from £4.7bn last year to £9.7bn in 2007, an increase of 104 per
cent year-on-year.
The growth in mortgages occurred despite an alteration in the
way they are accounted for by the NACFB. “We have asked members to
separate out bridging and short-term finance from the commercial
mortgage figures, to get a more accurate picture of the size of the
market and the amount of broker activity,” said Tyler.
As a result of this change, Tyler added, there has been “a
slight drop off in the amount of commercial mortgages completed
over the last 12 months in comparison to the previous year”.
He added: “However, it is a very small decrease and combined
with last year’s methods for calculating activity there is actually
a 20 per cent increase in our figures for commercial
mortgages.”
Increased diversification of commercial mortgage brokers are
also behind the drop off in their workloads in their core area.
According to the NACFB, around one third of commercial mortgage
brokers are “experimenting” with leasing and asset finance.
