Smaller mortgage lenders enjoyed the biggest growth during 2016 as challenger banks and specialist firms continued to increase their market share, according to the Council of Mortgage Lenders (CML).
TSB Bank saw the most significant growth among the smaller lenders, increasing its market share by 0.5 percentage points and moving up one place in the table to 10th position.
Meanwhile, Precise Mortgages grew its lending by 54 per cent, Metro Bank by 67 per cent, Fleet Mortgages by 150 per cent and Legal & General Home Finance by 200 per cent.
While the proportion of new lending by the top 10 firms remained steady at 84 per cent in 2016, there were some significant shifts in activity.
Lloyds Banking Group remained the largest mortgage lender in the UK, but its market share shrank from 17.3 per cent in 2015 to 15.6 per cent last year.
In contrast, The Royal Bank of Scotland grew its share by 1.8 percentage points to 12.9 per cent, rising one place in the table to become the third-largest lender.
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 | 3.7 | 7 | 8 | 3.6 |
| Virgin Money | 8 | 8.4 | 3.4 | 8 | 7.5 | 3.4 |
| Yorkshire BS | 9 | 7 | 2.9 | 9 | 6.6 | 3 |
| TSB Bank | 10 | 6.6 | 2.7 | 11 | 4.8 | 2.2 |
Overall, gross lending in 2016 rose 11 per cent year-on-year to reach £245bn - a slightly higher rate of market growth than the 9 per cent seen in the preceding year.
Martin Stewart, director at London Money, said: “What the smaller lenders have done is taken the fight to the criteria, as opposed to the mainstream lenders who have just been fighting on price.
“I don’t think the big lenders have been growing their book at all over the past 12 months, and that has allowed the smaller lenders to move in and operate between the gaps that [the larger firms] are not able to operate in.
“We are now meeting lenders we have never met before, so they are making an effort to put boots on the ground and meet brokers, and by virtue of that they will pick up business.”
simon.allin@ft.com
