From 1st July the Council of Mortgage Lenders is integrated into a new trade association, UK Finance. For the time being, all UKF mortgage information will continue to be published on this website, and UKF member-only mortgage information will only be available here.

UK Finance represents around 300 firms in the UK providing credit, banking, markets and payment-related services. The new organisation takes on most of the activities previously carried out by the Asset Based Finance Association, the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association. Please go to www.ukfinance.org.uk for wider content and updates from UK Finance.

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Largest mortgage lenders 2016 – smaller firms show the strongest growth!

Analysis

Published: 20 June 2017 | Author: James Tatch

Today, we publish our data showing mortgage lending by CML members in 2016.

Our tables show members’ gross mortgage lending in the latest calendar year and balances outstanding at the end of 2016, rounded to the nearest £100 million and ranked on the same basis. This means that the very smallest firms – those with under £50 million of lending – are rounded to zero, and therefore do not feature in the table.

Virtually all our members provided data, although a small number did not give permission to publish figures. In total, our members reported data for both new lending and mortgage balances accounting for some 97% of the total mortgage market as published by the Bank of England.

Gross lending overall in 2016 totalled £245 billion, up 11% on 2015, which was a slightly higher rate of market growth than the 9% seen in the preceding year. As the detailed data downloadable in Table 1 shows, there was a corresponding increase in marketplace competition, too. Sixty lenders appear in our table for gross lending last year (and therefore lent at least £50 million in 2016), up from 55 in the preceding year.

As Chart 1 below shows, the 10 largest firms continue to undertake the bulk of lending, while smaller players made a major contribution to lending growth. However, the past two years have seen some different movements amongst these smaller peer groups.

In 2015, medium-sized lenders saw particularly strong growth, with a 56% increase in annual lending volumes. They accounted for 12% of total lending, compared to 8% in the preceding year. In 2016, however, these medium-sized lenders saw a gentler rate of growth, and it was the turn of those in the next tier down – those ranked 21-30 by volume of lending – to forge ahead. These firms saw lending volumes grow by 60% in aggregate.

Chart 1: Gross lending by peer group, 2016

Image of Chart 1 Gross mortgage lending by peer group, 2016

Source: CML Economics

Download the data

The proportion of new lending by the top 10 firms remained steady at 84% in 2016. Within this, however, there were some sizeable movements: Lloyds Banking Group remained the largest mortgage lender in the UK but continued to shrink its market share, from 17.3% in 2015 to 15.6% last year. Santander UK also saw a contraction in market share, from 11.8% to 10.4%. Moving in the other direction, The Royal Bank of Scotland grew its share by 1.8% to 12.9%, rising one place in the table to become the third largest lender.

Continuing a trend we have seen for the last two years, a number of challenger banks and specialist lenders also made headway. Among these, TSB Bank saw the most significant growth, increasing market share by 0.5% and moving up one place in the table to 10th position. And a number of others in this group all saw a significant expansion of activity, most significantly Precise Mortgages with lending growth of 54%, Metro Bank (67%), Fleet Mortgages (150%) and Legal & General Home Finance (200%).

Table 1: Top UK mortgage lenders by gross lending

 

Lender Rank (2016) Lending (£bn) (2016) Market share (2016) Rank (2015) Lending (£bn) (2015) Market share (2015)
Lloyds Banking Group 1 38.3 15.6 1 38.4 17.3
Nationwide BS 2 35.3 14.4 2 30.5

13.8

Royal Bank of Scotland 3 31.6 12.9 4 24.7 11.1
Santander UK 4 25.5 10.4 3 26.1 11.8
Barclays 5 20.7 8.4 5 19.7 8.9
HSBC Bank 6 15.7 6.4 6 12.5 5.6
Coventry BS 7 9.0 3.7 7 8.0 3.6
Virgin Money 8 8.4 3.4 8 7.5 3.4
Yorkshire BS 9 7.0 2.9 9 6.6 3.0
TSB Bank 10 6.6 2.7 11 4.8 2.2

 

Source: CML Economics

Notes:

1. Download the full list of CML members' lending by outstanding mortgage balances and by gross mortgage lending for 2016 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 here:

http://www.bankofengland.co.uk/statistics/Documents/reporters/defs/def_is.pdf

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.

Although Lloyds Banking Group’s balances outstanding declined by almost 3% to £293 billion, it remained the lender with the largest mortgage assets, accounting for 22.2% of the total. Nationwide Building Society and The Royal Bank of Scotland increased their balances outstanding and their market share of mortgage assets to 13% and 9.8% respectively. A little further down the table, Coventry Building Society, Virgin Money and TSB Bank all increased their market share of outstanding mortgage assets.

Table 2: Top UK mortgage lenders by outstanding mortgage balances

Lender Rank (2016) Balances (2016) Market share (2016) Rank (2015) Balances (2015) Market share (2015)
Lloyds Banking Group 1 293.0 22.2 1 300.9 23.4
Nationwide BS 2 171.4 13.0 2 160.6 12.5
Santander UK 3 153.6 11.6 3 152.1 11.8
Royal Bank of Scotland 4 129.4 9.8 5 117.3 9.1
Barclays 5 127.9 9.7 4 127.3 9.9
HSBC Bank 6 78.1 5.9 6 74.7 5.8
Yorkshire BS 7 32.9 2.5 7 32.4 2.5
Coventry BS 8 32.8 2.5 8 29.3 2.3
Virgin Money 9 29.6 2.2 10 25.3 2.0
TSB Bank 10 26.8 2.0 11 23.8 1.8

 

Source: CML Economics

Notes:

1. Download the full list of CML members' lending by outstanding mortgage balances and by gross mortgage lending for 2016 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 here:

http://www.bankofengland.co.uk/statistics/Documents/reporters/defs/def_is.pdf

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.

What lies ahead?

In our most recent market forecasts, we were more pessimistic than before about economic and (to a lesser extent) housing market prospects for 2016 and 2017. This was driven in part by the uncertainties arising from the EU referendum vote.

With a hung parliament following the recent general election, these uncertainties are more accentuated, making it even more difficult to predict what lies ahead for the mortgage market. We will explore this in a little more detail in our market commentary, due to be published on Thursday of this week. But the data we publish today, showing increasing diversity and competition, suggests that the mortgage market is well equipped to react and respond to the evolving needs of mortgage customers in the UK.

Downloads

  1. Largest mortgage lenders - 2016 (XLSX 25KB)