As a result of the decline, the number of new agreements was noted at 1,302, which, in monitory terms equated to £56m in January.
In the three months to January, the number of new agreements was down 31% to 4,685, equating to £193m.
On an annual basis, the quantity of new agreements dropped by 42% to 16,243, with the value of the new business noted at £680m.
Figures also show that consumer finance new business fell in January 2021 by 34% compared with the same month in 2020.
Fiona Hoyle, director of consumer & mortgage finance and inclusion at the Finance & Leasing Association (FLA), said: “The fall in new business volumes in January is not surprising given the lockdown restrictions currently in place.
“We expect demand in this market to increase significantly during 2021 as consumer confidence improves.”
Geraldine Kilkelly, director of research and chief economist at the FLA, added: “With online sales now accounting for a record 35% of all retail sales, it is not surprising to see the retail store and online credit sector performing well despite the UK-wide lockdown restrictions.
“A strong recovery in consumer spending is expected in the second half of 2021 supported in part by household savings.
“Our latest research also suggests that the UK consumer credit market will return to growth this year, with new business expected to increase by 13% in 2021 as a whole, and the quarterly level of new credit to return to pre-crisis levels in the final quarter of 2021.”
