Santander sees net mortgage lending fall

Santander sees net mortgage lending fall

Santander has seen its net mortgage lending decrease to £1bn after it decided to compete on service rather than price.

The bank said the mortgage market is “highly competitive” and it will focus on customer service.

This "management pricing action", Santander said, means its net mortgage lending will be “slightly below the market”.

In the first nine months of 2016 Santander saw gross mortgage lending of £19.5bn and net lending of £1bn.

This compares with £19.6bn and £2.2bn for these respective figures in the same period last year.

Santander has also said it will be building its buy-to-let book by focusing on non-professional landlords

In its quarterly management statement it said: “This segment is closely aligned with residential mortgages; this also accounts for the majority of the BTL market.

“In line with the market, we saw a spike in BTL mortgages ahead of the April 2016 stamp duty increase.”

In the first nine months of 2016 Santander completed 9,700 buy-to-let mortgages, representing 9 per cent of new business flow, at an average LTV of 68 per cent.

Across the wider business Santander posted profits before tax of £1. 5bn, up 9 per cent thanks in part to growth in its retail current account balances of £11.3bn.

Operating costs were down £7m because of digitalisation “supporting operational efficiency”, which includes an online mortgage application tool allowing customers to remortgage in around 40 minutes.

Nathan Bostock, the bank’s chief executive, said: “Although we have not seen a material impact on our business in the short period since the EU referendum, we do expect a more challenging macroeconomic environment ahead.

“By building upon the strong foundations we already have in place, Santander UK is well positioned to succeed despite macroeconomic headwinds.

“Furthermore, our good business performance, strong balance sheet and position as the only scale challenger in the UK provide us with opportunities to further build our product set and relationships with existing and new customers in the period ahead."

Mike Richards, director of London-based Mortgage Concepts Associates, said: "I have not noticed Santander's service being any better than it has been before.

"I think there is scope to compete on service rather than price in the current market, as long as they are sensible and don't ask for ridiculous amounts of information above and beyond what would normally be required."