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Largest mortgage lenders 2015 - challenger and specialist lenders show strongest growth in competitive market

Analysis

Published: 28 July 2016 | Author: James Tatch

Today, we publish our data showing lending by CML members in 2015, as well as the size of their outstanding mortgage assets.

Sharp-eyed readers will notice a change in wording here: in previous years, our data showed the largest mortgage lenders, with a list limited to the 20 or 30 biggest firms. But this year we have re-drawn the scope of the exercise, and are able to show lending for the majority of CML members. (Lenders with under £50 million of lending are not captured by our rounding up to £100 million and so do not feature in the table. In addition, a small number of members did not want to provide data for public use.)

In doing this, we have taken the opportunity to standardise the exercise, aligning with the figures lenders report to the Bank of England. This means there are some (mostly small-scale) changes in individual lenders’ figures and rankings, when compared to those shown in previous years.

What the tables show

Virtually all members provided figures, and our table shows members’ gross mortgage lending and balances outstanding, rounded to the nearest £100 million and ranked on the same basis.  Only first charge lending is shown in the tables.

We publish the full tables below, showing gross advances by more than 50 firms last year, and balances outstanding form more than 70 lenders. But you need to download the data (below) to see the full tables.

In total, the data shows our members (including those not featured in the table) accounted for 97% of both outstanding mortgage balances and gross mortgage lending last year.

Gross lending overall in 2015 totalled £220 billion, up 8% on 2014. Growth at this level, while healthy, was lower than in the last couple of years. But competition in the marketplace continues to move strongly forward.

As Chart 1 shows, last year saw a contraction in market share by the largest lenders, with medium-sized firms, most notably those ranked 11th to 15th, acquiring share. This continues a trend seen since 2010 (although the reporting changes prevent a direct comparison with figures from before 2014).

Chart 1: Movements in market share, 2014-2015

Image of News & Views Chart 1 Movements in market share 2014-2015

Source: CML Economics

Download the data

A sectoral analysis adds further context; in aggregate, challenger banks and specialist lenders increased their gross lending by some 56% in 2015, translating to a 2.9% growth in their collective market share. By contrast, the established retail banks and building societies increased their gross lending by a more modest 4% and 9% respectively.

Chart 2: Growth in gross lending, 2014-2015

Image of News & Views Chart 2 Gross lending growth, 2014-2015

Source: CML Economics

Download the data

Moving up

The CML is an 'equal opportunities' trade body, with members of all ranks and sectors valued equally. But those analysts who look to the rankings in this table to identify how individual market opportunities and business plans have worked out in practice can see some big movers.

The same five lenders inhabit the top spots. But, within this, the Royal Bank of Scotland increased its gross lending by 25% in 2015, moving up from fifth to fourth in the process.

However, most of the biggest moves up the table came from the challenger banks and specialists. Of 16 lenders in this category, 11 moved up the table. These include Metro Bank, whose 200% growth in lending last year saw the most rapid ascent up the table, from 24th to 16th spot.

What next for the market?

Overall then, 2015 was a year where the mortgage market grew yet more competitive. Seen against a backdrop of a range of government policies looking to boost home-ownership, this increase in diversity and choice is clearly welcome.

Many lenders’ interim results published so far point to continuing healthy growth, in line with industry data showing lending in the first half of 2016 at its highest level since 2008.

Prospects for the mortgage market are, like any other sector of the UK economy, less certain than they were at the start of the summer. But our market has a robust and diverse base to support existing and aspiring home-owners and investors alike as we move forward.

Download the full list of CML members' lending by outstanding mortgage balances and by gross mortgage lending for 2015 here.

Table 1: Top 10 UK mortgage lenders by gross lending

Lender Rank (2015) Lending (£bn) (2015) Market share (2015) Rank (2014) Lending (£bn) (2014) Market share (2014)
Lloyds Banking Group 1 38.4 17.5% 1 39.6 19.5%
Nationwide BS 2 30.5 13.9% 2 27.1 13.3%
Santander UK 3 26.1 11.9% 3 25.9 12.7%
Royal Bank of Scotland 4 24.7 11.2% 5 19.7 9.7%
Barclays 5 18.8 8.6% 4 20.3 10.0%
HSBC Bank 6 12.7 5.8% 6 12.6 6.2%
Coventry BS 7 8.0 3.6% 7 7.4 3.6%
Virgin Money 8 7.5 3.4% 9 5.8 2.9%
Yorkshire BS 9 6.6 3.0% 7 7.4 3.6%
Clydesdale Bank plc 10 5.1 2.3% 10 4.9 2.4%

 

Source: CML Economics

Notes:
1. Download the full list of CML members' lending by outstanding mortgage balances and by gross mortgage lending for 2015 here.
2. Figures are aligned with those that firms report to the Bank of England in form IS as far as possible.
These definitions exclude second charge lending and lending to Housing Associations.
Further information on form IS can be found on the Bank of England website
3. In previous years not all lenders reported to these standard definitions.
Where this is the case, figures and/or rankings may differ from those shown in last year's table.
4. All figures are presented on calendar year basis, and rounded to the nearest £100 million.
5. Figures are presented on a financial group basis.

Table 2: Top 10 UK mortgage lenders by outstanding mortgage balances

Lender Rank (2015) Balances (£bn) (2015) Market share (2015) Rank (2014) Balances (£bn) (2014) Market share (2014)
Lloyds Banking Group 1 300.9 23.5% 1 301.5 24.0%
Nationwide BS 2 160.6 12.6% 2 152.3 12.1%
Santander UK 3 152.1 11.9% 3 149.3 11.9%
Barclays 4 127.1 9.9% 4 126.6 10.1%
Royal Bank of Scotland 5 113.1 8.8% 5 103.4 8.2%
HSBC Bank 6 75.7 5.9% 6 76.5 6.1%
Yorkshire BS 7 32.4 2.5% 7 31.5 2.5%
Coventry BS 8 29.3 2.3% 9 26.9 2.1%
Bradford & Bingley plc 9 25.8 2.0% 8 27.9 2.2%
Virgin Money 10 25.3 2.0% 11 21.8 1.7%


Source: CML Economics

Notes:
1. Download the full list of CML members' lending by outstanding mortgage balances and by gross mortgage lending for 2015 here.
2. Figures are aligned with those that firms report to the Bank of England in form IS as far as possible.
These definitions exclude second charge lending and lending to Housing Associations.
Further information on form IS can be found on the Bank of England website
3. In previous years not all lenders reported to these standard definitions.
Where this is the case, figures and/or rankings may differ from those shown in last year's table.
4. All figures are presented on calendar year basis, and rounded to the nearest £100 million.
5. Figures are presented on a financial group basis.