The latest figures are out, and six high street lenders are dominating the mortgage lending market in the UK. They are doing this in rather impressive fashion also. The Council of Mortgage Lenders (CML) reported the six lenders compiled a market share of just over 92 per cent for last year, which carries with it a notable change from 2008. That year the “super” six only took about 80 per cent market share. This confirms one thing – consumers had few choices during the year of 2009. It was either that or most applicants could only “fit” into the lending criteria of these six banks.
Nigel Bedford of Largemortgageloans.com, commented on the limited opportunities for mortgage loans, saying: “With further alignment of brands within these banking groups – particularly by Lloyds, Santander and RBS – this means that genuine consumer choice is being severely restricted.”
On the flip side, attempts at mortgage fraud have increased drastically, as reported by Experian. They noted that there were almost 40 per cent more attempts at fraud during the first half of 2010, than in the second half of 2009. Hard to believe as it is, 35 out of every 10,000 applications were caught and ruled fraudulent, which is more than double the amount during the second half of 2007.
The rank of largest to the smallest for the big six high street lenders is as follows: Lloyds Bank, Santander, Nationwide, RBS, Barclays and finally HSBC.
Lloyds Bank issued almost 25 per cent of all mortgages in the UK, but is still one of the banks which became involved with the financial turmoil and is now partly owned by the government. RBS is another bank which the government has a substantial controlling interest in. They issued just over 12 per cent of the mortgages. Barclays issued just under 10 per cent, while HSBC issued 9.7 per cent. Surprisingly the top three lenders wrote 6 out of every 10 mortgages for the entire UK.
The figures confirm tha traditional building societies are not even in the lending game. Once leading Yorkshire and Leeds accounted for less than 1.0 per cent of all mortgages issued.
These huge numbers suggest alarming facts about the practical monopoly which is taking place with UK mortgages. A strategy which could lead to major issues like the ones the US is facing with 2 predominant forces in the lending arena – Freddie Mac and Fannie Mae.
Although the Bank of England has issued everything but warnings for them to lend to businesses, the latest released data suggests that many of the biggest lending houses on high street are deeply entrenched in the retail property market.