Lloyds’ market share drops to 18.3 per cent

Lloyds Banking Group’s mortgage lending shrank for the second year running in 2012, meaning its share of the UK mortgage market has now dipped well below 20 per cent, down from 22 per cent a year earlier.

Gross lending fell to £26.2bn for the year, down 6.4 per cent from £28bn in 2011 and down 12.6 per cent on the £30bn advanced in 2010.

This means the group had an 18.3 per cent share of the UK mortgage market at the end of 2012, based on the Council of Mortgage Lenders’ assumption that gross lending reached £142.6bn in 2012.

The average loan-to-value of Lloyds’ mortgage book increased to 56.4 per cent at 31 December 2012, from 55.9 per cent a year earlier.

For new business, the group reported an average LTV of 62.6 per cent at the end of last year, up from 62.1 per cent in 2011.

The bank managed to reduce its pre-tax losses from £3.5bn in 2011 to £570m in 2012, despite having to set aside almost £4bn to pay claims relating to the misselling of financial products.

This included £3.5bn for payment protection insurance and £400m for interest rate swaps.

Other costs which contributed to the loss include £570m towards its plan to sell 632 branches and £676m as a result of implementing a range of cost-cutting measures.

Lentune Mortgage Consultancy managing director Stuart Gregory says: “I would expect Lloyds’s market share to decrease further with the upcoming sale of some of its branches and part of its mortgage book.”