Lloyds Bank has once again topped the list of the UK’s biggest mortgage lenders but it would seem there is strong competition from specialist providers and challenger banks.
UK Finance today published the data which provides an insight into how much money is currently being lent by the mortgage market as a whole, but also how individual lenders’ ‘books’ – or outstanding balances – compare to each other and to previous years.
The top ten lenders in UK Finance’s list remain the same for 2017 as for previous years with household names such as Santander, Barclays and Royal Bank of Scotland remaining strong in the market.
Analysts at UK Finance reported that while gross lending in the year was up by 4% this was not as healthy as the 11% growth seen in the previous year.
But while the amount being lent overall was down, the number of lenders entering UK Finance’s table has increased in 2017 from 60 lenders to 65.
Specialist lenders and challenger banks
What was very clear from the data is that specialist lenders and the so-called challenger banks are starting to make a real mark on the mortgage market.
Callum Bilbe, analyst for data research at UK Finance, said these lenders were leading the way. He added: “Looking at the table on a sectoral basis, it’s clear that whilst all types of lenders did see an increase in their lending overall, it is the challenger banks and specialist lenders who are doing the most new business proportionately with almost 20% increase in activity.”
There were other lenders who, although not making the top ten, did make a significant leap up the table this year and experiencing huge increases in lending activity.
Foundation Home Loans and Pepper UK both increased their lending activity by 200% in 2017. But other lenders such as Paragon, Legal & General, Tesco and Metro Bank also made sizeable jumps up the table thanks to big increases in their lending.
Bilbe also gave his outlook for the next year for the mortgage market. He said: “Lending in the early months of 2018 has, so far, outpaced our forecasts, driven largely by stronger-than-expected remortgage activity.
“The uncertainties we set out last year – not least those relating to the UK economy – remain. These have the potential to affect the path of lending for the rest of the year and beyond.
“However, the market has shown this year that, yet again, it is competitive and robust enough to continue to help UK mortgage customers as their needs change.”
Top ten UK mortgage lenders by balances outstanding
| Lender | Rank (2017) | Balances (2017) | Market Share (2017) | Rank (2016) | Balances (2016) | Market Share (2016) |
| Lloyds Banking Group | 1 | 290.3 | 21.2% | 1 | 293.0 | 22.1% |
| Nationwide BS | 2 | 176.0 | 12.9% | 2 | 171.4 | 12.9% |
| Santander UK | 3 | 154.3 | 11.3% | 3 | 153.6 | 11.6% |
| Royal Bank of Scotland | 4 | 136.3 | 10.0% | 5 | 127.7 | 9.6% |
| Barclays | 5 | 131.3 | 9.6% | 4 | 127.9 | 9.7% |
| HSBC Bank | 6 | 82.2 | 6.0% | 6 | 76.3 | 5.8% |
| Coventry BS | 7 | 35.8 | 2.6% | 8 | 32.8 | 2.5% |
| Yorkshire BS | 8 | 34.0 | 2.5% | 7 | 32.9 | 2.5% |
| Virgin Money | 9 | 33.5 | 2.5% | 9 | 29.6 | 2.2% |
| TSB Bank | 10 | 28.1 | 2.1% | 10 | 26.8 | 2.0% |
Source: UK Finance
