With the Olympics almost upon us, we’re looking forward to relaxing and catching up with some award-winning sporting heroics over the next couple of weeks.
But before we do that, the annual mortgage lending figures from the Council of Mortgage Lenders have caught our eye. If you were awarding the traditional Olympic medals for market share, then these would be awarded as follows: gold to Lloyds Banking Group (19.9 per cent); silver to Santander (16.8 per cent); and bronze shared between Barclays and Nationwide Building Society (12.1 per cent each).
While the six largest lenders did the lion’s share of lending, the next tier of medium-sized lenders increased their market share last year. This is important because as the big lenders lose their appetite or are restricted in the lending they can do, it’s important for other lenders to step in and fill the gap, giving increased choice to borrowers. In fact, the six largest lenders may have done more lending in absolute terms (£113.8bn in 2011 compared to £110.8bn the year before) but their total share of the market declined from 81.9 per cent to 80.7 per cent last year. A modest decline perhaps but a decline nonetheless.
The larger mutuals all increased their market share, which is not surprising as Nationwide, Yorkshire, Coventry, Skipton and Leeds building societies have all offered competitive rates and terms, topping the ‘best buy’ tables over the past 18 months. They’re often more flexible than some of the bigger high-street lenders, because their size makes them more nimble. This is great for the competition and overall health of the market.
Of course, there are a whole host of lenders who don’t make it onto this list but are doing a sterling job and offer the best option for high-net-worth borrowers by a long way. I am, of course, referring to the private banks who are the lenders of choice if you have complicated income streams (bonuses, performance-related pay, retained profits in a business and offshore income, or if you require interest only).
We will never see a similar league table of market share and volumes of gross mortgage lending by the private banks but if you are interested in seeing whether they can provide a solution to your funding requirements, give us a call to find out.