UK & European Leasing & Asset           Finance Market Overview 
                                                                            

UK and European leasing markets remain resilient entering 2026. UK asset finance continues to outperform expectations on a monthly basis, while Europe’s top‑50 portfolios remain stable at €349bn. Policy changes—including the UK Autumn Budget reforms and ongoing ECB rate guidance—are reshaping pricing, fleet economics and capital planning across the sector.

 

United Kingdom Overview

 

Summary: The UK leasing and asset finance sector enters 2026 with steady demand, mixed asset‑class performance and a policy environment that continues to evolve. Business investment remains supported by asset finance despite uneven macro signals.

Market size: FLA members delivered £80.3bn in new lending in H1 2025, including £20.23bn of business asset finance. Full‑year 2025 figures are expected to show modest year‑on‑year growth, driven by strong late‑year momentum in several asset categories.

Asset class performance:

Latest monthly FLA data (September 2025) showed:

Business new car finance: ~11% year‑on‑year growth

Plant & machinery: ~11% year‑on‑year growth

Commercial vehicles: ~2% year‑on‑year decline

This divergence continues to shape portfolio mix as the sector moves into 2026.

SME lending: SME asset finance new business rose 14% year‑on‑year in September 2025. However, longer‑run SME growth remains uneven, reflecting sensitivity to credit conditions, sector‑specific investment cycles and ongoing cost pressures.

Industry confidence: The FLA Industry Outlook Survey (Q1 2025) reported 69% of respondents expecting some increase in new business over the following 12 months. As of early 2026, sentiment remains cautiously optimistic, supported by stabilising inflation and improving clarity on policy timelines.

Policy & regulation: The UK Autumn Budget introduced significant motoring tax reforms including a future EV mileage levy which are prompting reassessment of EV total cost of ownership, fleet economics and residual value assumptions.

 

European Market Overview

 

Summary: Europe’s leasing market remains stable, with the top lessors maintaining portfolio strength and consolidation reshaping the competitive landscape. ESG‑driven product innovation and digitalisation continue to accelerate.

Market size and structure: The AFE50 reported €349bn in lease receivables for 2024 (up 2% on 2023). The broader European market remains estimated at around €500bn. Early indications suggest 2025 closed with broadly stable portfolios and selective growth in key regions.

Regional highlights: France continues to dominate AFE50 rankings. German captives remain strong performers, supported by OEM‑led product innovation.

Southern Europe shows continued momentum in SME leasing, aided by improving credit conditions and EU‑funded investment programmes.

Interest rates and macro: ECB policy easing through 2024–25 brought key rates down from 2023 peaks, with mid‑2025 operational rates at 2.00% (deposit facility) and 2.15% (main refinancing). As 2026 begins, rate expectations remain central to pricing strategies, funding costs and customer appetite for leasing as a flexible financing tool.

Sustainability, digital and strategic moves: ESG reporting mandates and circular‑economy policies continue to drive growth in green leasing, lifecycle services and refurbishment‑based models. Strategic consolidation remains a defining theme, led by Groupe BPCE’s acquisition of Société Générale Equipment Finance, which has reshaped the upper tier of the European market and continues to influence competitive positioning into 2026.