Written by:
Callum Bilbe, Analyst, Data & Research, UK Finance

Today we published our data showing mortgage lending by UK Finance mortgage members in 2017.

Our tables show members’ gross mortgage lending in the latest calendar year and balances outstanding at the end of 2017, 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 – do not feature in the table.

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

Gross Lending: Specialist lenders and challenger banks have the most growth

For 2017, gross lending totalled £257 billion, up four per cent on 2016. This was lower than the 11 per cent growth seen in 2016. However, within this we have seen increased competition for business. This year there are 65 lenders in our table for gross lending, up from 60 lenders the year before.

Chart 1: Growth in gross lending for peer groups, 2016-2017

Source: UK Finance

Growth in new lending was strongest amongst lenders ranked 21-30 in 2017, who lent £3 billion more for housing than 2016’s 21-30 group – a growth rate of 40 per cent.

The largest lenders saw more modest growth. Although Lloyds has continued to increase lending activity with a seven per cent rise compared to 2016, the next three lenders on the table (Nationwide Building Society, Royal Bank of Scotland and Santander) all saw lower volumes than in 2016, compared to the previous year and corresponding contractions in market share. Despite this, there was no change in the top ten gross lending table, with all lenders retaining the same rankings as in 2016.

Table 1: Top ten UK Mortgage Lenders by gross lending

Lender Rank (2017) Gross Lending
(£bn) (2017)
Market Share (2017) Rank (2016) Gross Lending
(£bn) (2016)
Market Share (2016)
Lloyds Banking Group 1 41.0 16.0% 1 38.3 15.5%
Nationwide BS 2 31.7 12.3% 2 35.3 14.3%
Royal Bank of Scotland 3 30.9 12.0% 3 31.8 12.9%
Santander UK 4 25.2 9.8% 4 25.5 10.3%
Barclays 5 23.2 9.0% 5 20.7 8.4%
HSBC Bank 6 18.2 7.1% 6 15.6 6.3%
Coventry BS 7 8.6 3.3% 7 9.0 3.7%
Virgin Money 8 8.4 3.3% 8 8.4 3.4%
Yorkshire BS 9 7.8 3.0% 9 7.0 2.8%
TSB Bank 10 7.0 2.7% 10 6.6 2.7%

Source: UK Finance

However, there was movement in the 11-20 group: Paragon climbed from 21st to 19th with an impressive 78 per cent increase in lending activity. Legal and General also made a sizeable jump, moving from 27th to 23rd place following a 67 per cent increase in lending. Other lenders with significant lending growth include: Tesco Bank (71 per cent), Metro Bank (50 per cent), Foundation Home Loans (200 per cent), and Pepper UK (200 per cent).

Looking at the table on a sectoral basis, it’s clear that whilst all types of lenders did see an increase in their lending overall, it is the challenger banks and specialist lenders who are doing the most new business proportionately with almost a 20 per cent increase in activity.

Chart 2: Growth in gross lending by lender type, 2016-2017

Source: UK Finance

Balances Outstanding: Lloyds remains top as RBS moves up to fourth largest book

Lloyds Banking Group remains at the top of the balances outstanding table, despite a decrease in book size of one per cent. RBS had an increase of seven per cent for their balances outstanding, allowing them to overtake Barclays on the table and become the lender with the fourth largest mortgage assets in the UK. Below the top five, HSBC, Coventry, Virgin Money and TSB all increased their market share of outstanding mortgage assets.

Table 2: Top ten UK Mortgage Lenders by balances outstanding

Lender Rank (2017) Balances
(£bn) (2017)
Market Share (2017) Rank (2016) Balances
(£bn) (2016)
Market Share (2016)
Lloyds Banking Group 1 290.3 21.2% 1 293.0 22.1%
Nationwide BS 2 176.0 12.9% 2 171.4 12.9%
Santander UK 3 154.3 11.3% 3 153.6 11.6%
Royal Bank of Scotland 4 136.3 10.0% 5 127.7 9.6%
Barclays 5 131.3 9.6% 4 127.9 9.7%
HSBC Bank 6 82.2 6.0% 6 76.3 5.8%
Coventry BS 7 35.8 2.6% 8 32.8 2.5%
Yorkshire BS 8 34.0 2.5% 7 32.9 2.5%
Virgin Money 9 33.5 2.5% 9 29.6 2.2%
TSB Bank 10 28.1 2.1% 10 26.8 2.0%

Source: UK Finance

What’s next for the market

2017 was a good year for the mortgage market with more lenders competing for business, and gross lending continuing on an upward trend.

In our most recent market forecasts we predicted gross lending of £260 billion in 2018 – an increase of about two per cent. Lending in the early months of 2018 has, so far, outpaced our forecasts, driven largely by stronger-than-expected remortgage activity. The uncertainties we set out last year – not least those relating to the UK economy – remain; these have the potential to affect the path of lending for the rest of this year and beyond. However, the market has shown this year that, yet again, it is competitive and robust enough to continue to help UK mortgage customers as their needs change.

Largest mortgage lenders 2017 – challengers and specialists lead the way
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