Clydesdale breaks into the top 10 mortgage lenders in the UK

Michael Lloyd

July 30, 2019

Clydesdale Bank has broken into the top 10 mortgage lenders in the UK at the expense of TSB Bank, according to UK Finance.

In a list from UK Finance of the value of gross lending of its members, Clydesdale’s lending dropped from £5.9bn in 2017 to £5bn in 2018, with its market share dropping from 2.3% to 1.9%.

However, this was enough to replace TSB in 10th spot. TSB fell to 11th, with its lending dropping from £7bn in 2017 to £4.8bn last year.

Besides this change and Yorkshire Building Society moving up from ninth to eighth and Virgin Money from eighth to ninth, the order of the top 10 remained the same.

The top five in order of gross lending in 2018 were once again Lloyd Banking Group, Nationwide Building Society, Santander UK, Barclays. These were followed by HSBC Bank, Coventry Building Society and then Yorkshire Building Society.

Nationwide saw its market share increase from 12.2% in 2017 to 13.3% last year while Santander’s share rose from 9.7% to 10.05% and HSBC from 7% to 8%.

Sainsbury’s Bank has climbed from 52nd to 23rd in the list. Since launching into mortgages in April 2017, its lending rose from £0.1bn that year to £1.1bn in 2018, rising from 52nd place to 23rd spot in 2018.

Similarly, Masthaven Bank launched into the residential mortgage market in June 2017 and rose from 70th in the list that year to 52nd last year.

Metro Bank rose from 16th to 13th and The Co-operative Bank from 14th to 12th.

For 2018, gross lending totaled £268bn, up 3% year-on-year, yet below the 5.5% growth seen in 2017.

However, there was increased market competition for business, with 70 lenders in UK Finance’s table for gross lending, providing over £50m of mortgage lending to homeowners and landlords, up from 65 lenders the year before and 60 lenders in 2016.

Specialist lenders once again saw strong annual growth.

UK Finance said that patterns of borrower incomes have become more complicated, driven in part by growth in self-employment and contractor employment as well as an ageing population, with more people working for longer.

In this changing environment, lenders who have more bespoke, often manual, underwriting processes are well placed to help these customers, for example, in the later life sector, which saw the highest proportion of growth compared to any other sector.

Lenders have seen a higher demand for mortgages from older borrowers in the last few years, extending their maximum age criteria and adapting underwriting for those whose income in later life is more complex.

UK Finance said that this has facilitated a competitive and expanding mainstream later life lending market, and said this strong growth is also present in the equity release market.

In a blog from UK Finance, the regulator said: “From these figures, it is clear that lenders are attuned to the realities of an ageing population and recognise the need to innovate in the mortgage space to provide suitable products for this expanding customer base.”


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