Santander UK’s gross mortgage lending down 21%

27 July 2011 | By Natalie Thomas

Santander UK has seen a 21% fall in gross mortgage lending in the first six months of the year, compared to the first half of 2010.

Its gross lending was £9.7bn, compared to £12.4bn in the first half of 2010. It did £4.2bn of lending in Q1 of 2011 and £5.5bn in Q2 2011.

Its lending in the first half of 2011 represented a market share of 15.4%, down from 19.1% in the first half of 2010.

The LTV on new business in the first half was 64% and net mortgage lending was £0.4bn negative in the first half of 2011, which it says reflects the weaker pipeline from the last quarter of 2010 during which market pricing became less attractive in the lower LTV segments of the market.

The business returned to positive net lending in the second quarter of £0.2bn with positive net lending also expected in the second half.

Overall, Santander UK’s pre-tax profit is £839m, down 3% on the same period last year, it says this has been impacted by higher liquidity and regulatory costs.

The first half results include a provision for payment protection insurance remediation of £538m, which after tax, takes the profit to £300m.

Santander UK did not participate in the UK Court case on PPI, and has consistently settled claims over the last two years as they have arisen.

However, it says following the result of the court case, the decision by other UK banks to settle claims and the increased media activity surrounding this, it has seen an up lift in the volume of claims received and so it has taken the decision to take a one-off provision to cover the potential cost of expected claims.

Ana Botín, chief executive officer of Santander UK, says: “ Financial results are being adversely impacted by costs of liquidity, term funding and low interest rates.

“In line with other UK banks, a further provision for payment protection insurance remediation has also been made.

“Notwithstanding these factors, Santander UK has delivered profit in the first six months - maintaining its strong track record of profitability and strengthening its balance sheet.”

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Readers' comments (12)

David Nicholson | 27 Jul 2011 8:44 am
No doubt this is partly due to Santander's incredibly negative attitude to any new case they receive.
With many lenders you do at least get the feeling that they want to try and do a case, with Santander you get the strongest of impressions that they try really hard NOT to do a case.
Perhaps I am not te only broker trying to avoid using them unless abso;lutely necessary.
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roger watts | 27 Jul 2011 10:25 am
Davids comment's are on the nail, so what plenty more fish etc. i remember the 90's the abbey was like this up to the time they wanted to boost their lending figures for the sell out.Always jonny come lately , can't see them lasting in uk market for much longer, No tears here.
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Anonymous | 27 Jul 2011 10:53 am
Perhaps brokers have had enough of Abbey contacting their clients 6 months before a product expires and offer to waive redemption penalties and offer a product the broker can't get access to.
I will carry on submitting business to lenders have a fair retention process.
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paul wright | 27 Jul 2011 11:28 am
i havent a bad word to say about abbey. they are really good and complete quickly.
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Luke Atkinson | 27 Jul 2011 12:07 pm
Does anyone know if their funding will be affected if this Euro problem moves to Spain?

I read in the FT that a sovereign default by Greece will almost definitely spread to Italy and Spain, meaning investors will pull funds out of the Spanish Banks....

I'm not entirely sure of the internal structure of Santander but does anyone know if their Uk arm will be affected??
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mic2002 | 27 Jul 2011 12:24 pm
I have foud out recently they operate dual underwriting - a case was declined via brokers AIP.Customer went into branch and they were able to talk to underwriters and case done.This was FTB on 90% lTV.
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Anonymous | 27 Jul 2011 3:19 pm
Here we go the Abbey bashers are back out again. Apart from the issue of contacting customers early for renewing deals, I have had no issues with them all year. Service went a bit poor when exclusive deals first came out but other than that my last 8 cases have gone thru quite quickly and without issue. I even think they have relaxed their credit score a bit for 75% ltv and under.
If you want a slow lender try TMW for which each part of their process takes 2-3 days for acknowledgement then action. A current BTL case with an appeal on rental valuation has taken 31days and is as yet unresolved. Of that time 16 days has been downtime "in a queue"
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Anonymous | 27 Jul 2011 5:20 pm
Abbey seem to be the punchbag for many brokers. I find them to be ok as long as you keep on top of them and provide the information upfront. Much easier now with the new upload option. Submit payslips etc when app done. I have just had a 90% LTV sail through. 6 days from DIP to offer. Happy with that.
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Kevin Vella | 28 Jul 2011 3:56 pm
In April last year, abbey made several of their call centres redundant and in doing so lost experienced staff. My recent experience is summed up by ‘lack of ownership’.
Plenty of lenders out there doing volume business. Take note Abbey - room for improvement.
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colin | 30 Jul 2011 10:28 am
hhhmmm Abbey always seem to be able to split opinion like marmite. Until their recent 7 day sales, service was pretty good, but like anyone with market leading rates, volume will make service suffer. But those rates have attracted business which I might otherwise have advised a client to sit tight on SVR, so can t grumble there.

Then again you have the odd case where you come across the most anal underwriter and intereptation of policy that beggars belief.

Their retention policy plus dual pricing and underwriting leaves a bad taste but they aren t the first and won t be the last. So its clear that the Intermediary channel ranks second, the branch network or direct can try and get the client B&C, MPPI, Current Account etc etc.....

But of course when they want volume which the direct channels cannot produce they become the brokers friend with their 7 day sales. Plus ca change
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