Largest Mortgage Lenders - Strong 2018 growth in specialist lending

Today, we publish our data showing mortgage lending by UK Finance mortgage members in 2018.

Gross Lending: Equity release and other specialist lenders show the most growth

For 2018, gross lending totalled £268 billion, up three per cent on 2017. This was below the 5.5 per cent growth seen in 2017. However, we saw increased market competition for business, with 70 lenders in our table for gross lending (providing over £50 million of mortgage lending to homeowners and landlords), up from 65 lenders the year before and 60 lenders in 2016.

Chart 1: Growth in gross lending by lender type, 2017-2018

 

Source: UK Finance Largest Lenders

Specialist lenders once again saw strong annual growth. Patterns of borrower incomes have become more complicated, driven in part by growth in self-employment and contractor employment as well as an aging population, with more people working for longer. In this changing environment, lenders who have more bespoke, often manual, underwriting processes are well placed to help these customers. The best example of this is in the later life sector (borrowers aged 55 and over) of the mortgage market, which saw the highest proportion of growth compared to any other sector.

Chart 2: Number of new loans to borrowers age 55 or older

 

Source: UK Finance Residential Mortgage Survey

Lenders have seen a higher demand for mortgages from older borrowers in the last few years, extending their maximum age criteria and adapting underwriting for those whose income in later life is more complex. This has facilitated a competitive and expanding mainstream later life lending market.

This is also evident within the equity release mortgage market, where we continue to see strong growth. This is driven in part by investment from firms in the life and pensions space, for whom the long-term income stream from equity release mortgages aligns well with their liabilities.

From these figures, it is clear that lenders are attuned to the realities of an ageing population and recognise the need to innovate in the mortgage space to provide suitable products for this expanding customer base.

 

Area of expertise:

Notes to editor

<p><strong>Notes to editors:</strong></p>
<p>Our tables show members? gross mortgage lending in the latest calendar year and balances outstanding at the end of 2018, 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.</p>
<p>Virtually all our mortgage 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*.</p>
<p> </p>
<p><strong>*The Bank of England?s definition for mortgage loans:</strong></p>
<p> </p>
<p>Secured loans to individuals and individual trusts secured on residential properties (both</p>
<p>freehold and leasehold) which are or will be occupied by the borrower, or which are</p>
<p>rented (i.e. let to others), where such loans are fully secured by a first equitable or legal</p>
<p>charge. This includes equity release products.</p>
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