|There was little change in the names at the top of the list of largest lenders last year, according to the new CML top 30 lenders’ data published today. However, mid-sized lenders increased both their lending levels and their market share, and there were five first-time entrants to the “top 30” by gross lending in 2010.
The CML publishes two lists of lenders by relative size. The first is based on the level of lending that each lender undertook during the year. The second is based on the overall value of mortgages held with each lender, irrespective of when they were taken out.
Particularly since the financial crisis, there has been a significant difference between the two lists. This is because some lenders which were previously active have stopped doing any new lending or are undertaking a lower volume of lending, while other lenders which were relatively active in 2010 (albeit in a very subdued market) do not necessarily have such a significant back book of existing business.
While the CML makes strenuous efforts to check accuracy, it is crucial to note the various exclusions and limitations to comparisons that apply to both lists (which are fully set out in the footnotes to the tables). If citing any of the information published in the tables, please pay particular attention to the notes.
The top 30 by gross lending volume
It will surprise no-one that the same six lenders as in 2009 dominated gross lending in 2010, together accounting for an estimated 81.5% of the total volume of lending undertaken last year. This was slightly down from the 83% market share that these lenders collectively represented in 2009.
In terms of value, the largest six lenders collectively accounted for just under £111 billion of lending, down from £119 billion in 2009.
Increased lending by mid-sized lenders
Perhaps the most notable feature of this year’s gross lending table is the increase both in lending volume and in market share of the mid-sized lenders. Those lenders ranked from 7-15 in the table together undertook around £19.6 billion of lending last year, nearly double their combined lending of £10 billion in 2009.
Together, the mid-sized lenders’ market share rose from a fraction over 7% in 2009 to 14% in 2010. While this is in the context of a market that was extremely subdued, it is nevertheless a notable change. It certainly points to the capacity and appetite of the mid-sized lenders to continue to bring diversity to a market that has become highly concentrated among a small number of large providers in the wake of the financial crisis.
New entrants among the smaller lenders
Among the smaller top 30 lenders (each with market share below 0.5% of the total), a number of new entrants appear on the list. 2010 saw the following lenders in the top 30 for the first time: Saffron Building Society, Cambridge Building Society, UBS, Aldermore Mortgages and Market Harborough Building Society.
Together, the lenders ranked from 16-30 undertook 2.5% of the share of total gross lending in 2010, leaving around 2% of the market spread among the remaining active lenders outside the largest 30.