Largest mortgage lenders 2015 - challenger and specialist lenders show strongest growth in competitive market
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
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
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.
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%|
|Royal Bank of Scotland||4||24.7||11.2%||5||19.7||9.7%|
|Clydesdale Bank plc||10||5.1||2.3%||10||4.9||2.4%
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%|
|Royal Bank of Scotland||5||113.1||8.8%||5||103.4||8.2%|
|Bradford & Bingley plc||9||25.8||2.0%||8||27.9||2.2%|