The latest data from CML has revealed that small and medium sized lenders are experiencing strong growth despite the 10 largest lenders continuing to undertake the lions share.
During 2015, medium-sized lenders saw particularly strong growth, with a 56% increase in annual lending volumes. In 2016, however, these medium-sized lenders saw a gentler rate of growth, and it was the turn of those in the next tier down – those ranked 21-30 by volume of lending – to forge ahead. These firms saw lending volumes grow by 60% in aggregate and include Paragon, Nottingham BS, Northview Group, Tesco Bank, L&G Home Finance and Fleet Mortgages.
The proportion of new lending by the top 10 firms remained steady at 84% in 2016. Within this, however, there were some sizeable movements: Lloyds Banking Group remained the largest mortgage lender in the UK but continued to shrink its market share, from 17.3% in 2015 to 15.6% last year.
Santander UK also saw a contraction in market share, from 11.8% to 10.4%. Moving in the other direction, The Royal Bank of Scotland grew its share by 1.8% to 12.9%, rising one place in the table to become the third largest lender. Continuing a trend seen for the last two years, a number of challenger banks and specialist lenders also made headway. Among these, TSB Bank saw the most significant growth, increasing market share by 0.5% and moving up one place in the table to 10th position.
A number of others in this group all saw a significant expansion of activity, most significantly Precise Mortgages with lending growth of 54%, Metro Bank (67%), Fleet Mortgages (150%) and Legal & General Home Finance (200%).
Gross lending overall in 2016 totalled £245 billion, up 11% on 2015, which was a slightly higher rate of market growth than the 9% seen in the preceding year. There was a corresponding increase in marketplace competition, too. Sixty lenders appear in the CML’s table for gross lending in 2016 (firms who lent over £50 million), up from 55 in the preceding year.
Author – Warren Lewis