Challenger banks and specialist lenders increased their gross lending by 56 per cent last year, according to the Council of Mortgage Lenders’ latest analysis, translating to a 2.9 per cent growth in their collective market share.
By contrast, established retail banks and building societies increased their gross lending by a more modest 4 per cent and 9 per cent respectively.
However, the top 10 table of CML members remained the same, although within this the Royal Bank of Scotland increased its gross lending by 25 per cent in 2015, moving up from fifth to fourth in the process.
Yorkshire Building Society fell two places, falling from 3.6 per cent to 3 per cent market share, while Virgin Money moved up a place, as its market share went from 2.9 to 3.4 per cent.
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, including Metro Bank, whose 200 per cent growth in lending last year saw the most rapid ascent up the table, from 24th to 16th spot.
In total, the data showed CML members accounted for 97 per cent of both outstanding mortgage balances and gross mortgage lending last year.
Gross lending overall in 2015 totalled £220bn, up 8 per cent on 2014. Growth at this level was less than in the last couple of years, but the CML stated competition in the marketplace continued to move “strongly forward”.
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; continuing a trend seen since 2010.
| UK mortgage lenders by gross lending | 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% | 8 | 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 | 10 | 5.1 | 2.3% | 10 | 4.9 | 2.4% |
In the last few days, several lenders have reported mixed fortunes during the first half of this year.
This morning, despite pre-tax profits doubling to £2.5bn for the half year, Lloyds Banking Group announced plans to cut 3,000 jobs and 200 branches.
Santander UK also reported a 16 per cent increase in first half profits to £1.07bn, although its attributable profit to the wider group was down 12 per cent per cent, due to the impact of new banking taxes.
Yorkshire Building Society recorded a core operating profit of £62.5m for the first six months of this year, down by almost half on the £115.9m recorded at the same point last year, while Skipton Building Society reported “solid first half performance” and total profit before tax of £76.8m - up from £72.1m at the end of June 2015.
Metro Bank’s asset and revenue growth saw it reduce underlying quarterly losses after tax to £4.1m, compared to £10.2m in the fourth quarter of 2015 and £7.9m in the first quarter of 2016.
Meanwhile, Virgin Money’s underlying profit before tax was up by 53 per cent to £101.8m during the first six months, from £66.4m in the same period last year.
The CML concluded 2015 was a year where the mortgage market grew yet more competitive.
“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,” read its summary, adding: “Our market has a robust and diverse base to support existing and aspiring home-owners and investors alike as we move forward.”
peter.walker@ft.com
