Top five lenders accounted for 82% of all lending in 2009
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The Council of Mortgage Lenders has revealed that the five largest lenders accounted for 82% of all lending activity during 2009.
This compares to 2007 when the top five lenders accounted for 64% of gross lending and the CML warns that further market consolidation may ensure that the current pattern persists in the long term.
Lloyds Banking Group retained the top spot with a 28% market share of total mortgage balances outstanding worth £346bn, but this was down £4bn on the £350.5bn recorded in 2008. But year-on-year gross lending more than halved, falling from £78bn in 2008 to just £34.7bn in 2009.
In second place was Santander, with a market share worth 13.5% worth £166.8bn and up from £158bn in 2008. Gross lending fell from £35.2bn in 2008 to £26.4bn in 2009.
In third was Nationwide with an 11% share worth 138.9bn, only fractionally up on the £138bn in recorded in 2008. Gross lending fell from £29.5bn in 2008 to £25.5bn.
In fourth position was Barclays, which went from £82.2bn in 2008 to £87.9bn in 2009, which was a market share of 7.1%. In terms of gross lending it fell from fourth to fifth in terms of estimated market share, with gross lending falling from £22.9bn in 2008 to just £14.2bn in 2009.
And Royal Bank of Scotland, in fifth, also had total mortgage balances outstanding of £87.9 at the end of 2009, up from £77.5bn in 2008. But gross lending only fell marginally from £18.7bn in 2008 to £17.6bn in 2009, meaning it moved up into fourth position in terms of overall market share.
Not surprisingly Northern Rock, with its initial policy of encouraging borrowers to remortgage away after it was nationalised, reduced its value of total mortgages from £66.7bn in 2008 to £60.1bn in 2009. However, gross lending at the lender surged from £2.9bn in 2008 to £4.2bn in 2009.
HSBC increased its total amount of mortgages from £50.5bn to £59bn year-on-year. Gross lending also fell from £17.2bn to £14bn.
Readers' comments (2)
Andy | 8 Sep 2010 1:45 pm
Its almost as if this is what they wanted all along!
Want somewhere to live?
Then be prepared to pay an absolute fortune to 1 of our 5 preferred lenders
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Ketan Yadav - Avenue & Co Private Finance | 8 Sep 2010 6:33 pm
Pareto's law right?
These figures (as published by the CML today) show the following:
1. HSBC isnt lending as much as it is advertising.
2. The top 5 will have market share of over 90% within 2 yrs
3. Consumers will have less choice but as competition intensifies for the few who are still borrowing, rates will fall further.
4. Dual Pricing will have to play a part with all the lenders so that they can try and retain existing business as lending figures are falling and will continue to do so going forward as criteria constraints take hold.
5. Therefore, point 4 - Products for the broker market will reduce by over 50% within 5 yrs.
6. Unless a) the smaller lenders and new lenders drastically improve lending rates and LTVs - they wont survive and b) Unless more lenders come into play/lend, the top 5 lenders market share will eventually hit over 95% within 10 yrs. Therefater Lloyds BOS Group effectively have an unfair advantage - then what?
Discuss.
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