The UK’s six biggest mortgage lenders saw their share of lending dip for the fourth consecutive year in 2013, according to the Council of Mortgage Lenders.
Data published today by the CML shows the top six lenders’ share of gross lending fell from 76 per cent in 2012 to 72 per cent last year.
In 2006, prior to the financial crisis, the six largest mortgage lenders accounted for 61 per cent of gross lending. This escalated to an 86 per cent share in 2009 as a result of smaller lenders exiting the market and other firms affected by “market consolidation”.
However, since 2009 figures show a reversal of that trend with the top six lenders seeing their share of gross lending fall from 86 per cent to 82 per cent in 2010, 81 per cent in 2011, 76 per cent in 2012 and finally to 72 per cent in 2013.
Lloyds Banking Group retained the top spot as the UK’s largest mortgage lender with new lending of £35.5bn last year, up from £26.2bn in 2012 despite removing all new loans originated through the TSB brand, which is now accounted separately. Its market share rose from 18 per cent in 2012 to 20.2 per cent last year.
Nationwide is also unmoved in second place, with £26.9bn in new lending giving it a 15.3 per cent market share. This represents a rise from £21.2bn in gross lending in 2012, when the lender held a 14.6 per cent share of the market.
Santander lifted two places from fifth to third in the rankings, with new lending of £18.3bn in 2013, compared to £14.6bn in 2012. This took its market share to 10.4 per cent from 10 per cent in 2012.
This shift places Santander above Barclays, which now sits in fourth place with a 9.6 per cent market share after advancing £16.9bn in 2013. A year earlier, it boasted an 12.5 per cent market share with £18.2bn advanced in new loans.
HSBC is down one spot to fifth, with £14.5bn of lending in 2013, accounting for 8.2 per cent of market share. A year earlier, HSBC had advanced £16.4bn in mortgage lending, giving it an 11.3 per cent market share.
Royal Bank of Scotland remains in sixth place with an 8.1 per cent market share, after advancing £14.3bn in new loans in 2013. A year earlier the bank lent £13.9bn, giving it a 9.6 per cent market share.
A spokesman for the CML says: “Perhaps the most striking change shown by today’s data is the shift in market concentration. In 2006, the top six lenders accounted for 61 per cent of total gross lending, but the exit of smaller lenders in the years immediately following this, together with a number of firms affected by market consolidation, led to increasing dominance by the big six. By 2009, those lenders undertook an estimated 86 per cent of all lending.
“Since then, the data clearly shows that competition is growing, both amongst the biggest lenders and across the market.”