Santander sees market share slip as HSBC & Nationwide climb table

Today, the CML published their data showing the largest mortgage lenders in 2012, which shows that while gross lending last year barely grew (£130 billion compared to £129 billion in 2011) this masks some major movements seen for lenders of all sizes.

Related topics:  Mortgages
Amy Loddington
29th August 2013
Mortgages

Ever since the onset of the financial crisis – and exacerbated by the wave of market consolidations that followed – the lion’s share of lending has been concentrated heavily amongst the six largest lenders. But whilst this was still the case in 2012, the top six's combined share of 77% was substantially down on the 81% seen in 2011, and is in fact lower than at any point since the height of market activity back in 2007.

Competition in the market is growing, bringing with it benefits to consumers shopping around for the mortgage deal to best suit their needs.

The six largest lenders as a whole reduced their lending in absolute terms as well, falling from £117 billion in 2011 to £111 billion last year. But this disguises substantial movement amongst the individual players; both Nationwide and HSBC strongly grew their lending (by 24%), whilst the other four all shrank their new business volumes – most significantly Santander, which saw a planned contraction in gross lending of 38%.

As a result, although the top six names are all still the same, the individual rankings have seen something of a reshuffle. Nationwide and HSBC climbed to become the second and fourth highest volume lenders respectively last year. Santander, consistently number two in the gross lending table since 2005, moved into fifth place.
 


There was plenty of healthy growth to be seen outside the top six too. This growth comes both from long-established lenders  – including the Coventry Building Society, which grew by 26% to become the seventh largest lender in the UK last year – and new names to the industry, for example Tesco Personal Finance, which lent £300 million in the year, placing them at joint 20th. In fact, outside the top six, 14 of the 17 other lenders significantly grew their mortgage lending in 2012, against a backdrop of an industry total which barely moved.

The mutual sector also grew as a whole. Even after removing the substantial growth seen by the UK’s largest building society, Nationwide, other mutuals within the top 20 grew in share by a combined 2%. Overall, mutuals in the top 20 accounted for 24% of total gross lending, up from 19% in 2011.

As in previous years, the lending totals in our tables are rounded to the nearest £100 million. Below the largest 20 lenders, there remains a significant clustering of firms on this rounded basis, with 16 further lenders reporting rounded total lending of £0.1 or £0.2 billion. As such, these rankings would not be particularly meaningful, but would be very sensitive to even very modest revisions in individual reported data. We will continue to present this table only to the level where results are both robust and meaningful.

Looking at the data on balances outstanding there is, as in most years, very little movement. Although total balances overall grew modestly, the combined share of the outstanding mortgage books – both for the six largest lenders and the entire top 20 – shrank a little. In total, the largest 20 mortgage books accounted for 91% of total balances outstanding in 2012, down from 91.9% in 2011.

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