The six biggest lenders in the UK increased their gross lending market share from 67.6 per cent to 70.6 per cent between 2018 and 2019, figures from UK Finance show.

The biggest lender in 2019 was Lloyds Banking Group, taking 17.2 per cent of the market, Nationwide, taking 12.6 per cent, NatWest Group, having 12.5 per cent of the market, Santander UK at 11.5 per cent, Barclays at 9.3 per cent, and HSBC, at 7.5 per cent.

Overall, gross lending in 2019 came to £268bn, which was a 0.3 per cent fall on 2018’s figure.

In terms of the value of mortgages outstanding, the rankings in 2019 read as: Lloyds Banking Group at £286.4bn, Nationwide at £189.8bn, Santander UK at £165bn, NatWest Group at £147.5bn, Barclays at £142.7bn, and HSBC, at £96.7bn.

In the buy-to-let market, gross lending in 2019 reached £42.2bn, which was a 4.2 per cent rise on 2018.

Here, the rankings for biggest lenders was a little more fluid, with first and second swapping places: Nationwide moved from second place in 2018 to first place in 2019, taking 15.6 pre cent of market share and Lloyds Banking Group dropped to second, having 11.9 per cent of the BTL market share in 2019.

Barclays remained in third place, with 9.8 per cent market share, followed by OneSavings Bank which too retained its place in fourth, with 9.2 per cent of market share.

Coventry Building Society was fifth, with 6.6 per cent of the market, Santander in sixth place, taking 5.9 per cent of market share, and in seventh in 2019 was NatWest Group.

This lender took 4.9 per cent of the market and, in doing so, move from the ninth position it occupied in 2018.

Lloyds Banking Group had £48.6bn in BTL mortgages outstanding in 2019, Nationwide £34.7bn, Barclays £19.4, Coventry Building Society £16.7bn, Virgin Money had £14.3bn outstanding, OneSavings Bank £12.4bn, and NatWest Group £12.3bn.

In a blog post, UK Finance analyst, data and research Callum Bilbe writes: “One of the possible explanations for this growth in the large banks could be a decline in lending from direct competitors, coinciding with the introduction of ring-fencing at the start of 2019.

“In a nutshell, ring-fencing meant that by the start of 2019 the largest UK banks were required to keep their core UK retail banking separate from the rest of their banking activities (such as investment).

“Because UK retail banking is ring-fenced, it means there are only certain things that banks can do with the money from borrower deposits. As deposit levels are on average higher than lending levels, these large lenders have used surplus retail deposits in the ring-fenced organisation to increase mortgage lending.

“This increase in supply of mortgages has contributed toward the average price of new mortgages dropping significantly, as larger building societies and mid-tier lenders compete with the largest banks to attract borrowers to their products.

“Additionally, larger lenders are able to take advantage of the internal ratings-based approach (to capital weighting (as opposed to the standardised approach that smaller firms follow).

He adds that the manual underwriting required by many borrowers have means that specialist lenders are still in demand. He says: “Overall, despite this increase in market share from the largest banks, the mortgage market has remained competitive with a variety of different types of lenders catering for all borrower needs.”