The UK Finance recently announced their annual lender league tables for 2020. This updated table seemed to go under the radar, so I thought I would take a quick look and see who the movers and shakers were last year.
2020 in view now
Now naturally 2020 was not your normal year and some lenders were impacted more than others, particularly those in the specialist sector.
Overall, UK Finance report gross mortgage lending to totally c£244bn. This is down 9.3% on 2019.
However, given the impact of the pandemic, I think this is quite a remarkable figure, particularly given the shut down in Q2.
The rebound was of course helped by stamp duty stimulus, but nonetheless, there was some fantastic work across the industry last year – and since – to keep lending levels buoyant.
At number one
Lloyds retained their top spot and was a lender that even increased their lending by £0.5bn.
Moreover, they saw their market share rise (from 17.1% to 19.1%) meaning that more-or-less one in five mortgages in 2020 were through Lloyds Group.
Two and three swap places
NatWest rose to the second spot – ousting Nationwide. This is despite NatWest total lending falling in 2020, but Nationwide’s fall in lending was greater with a c£6bn reduction.
Nationwide lost market share of 1.2%, which does not sound much, but that share is the equivalent market share commanded by Shawbrook, Aldermore, Foundation and Kensington combined.
HSBC make big gains
Santander also lost market share in 2020 whilst HSBC were grateful winners last year, increasing their lending by a whopping £4.3bn and increasing market share from 7.5% to 10%. HSBC were one of the winners of 2020 it seems.
Top 10 powerhouse
The top 10 lenders of 2029 were the same pack of lenders appearing in the top 10 in 2020. In fact, the gap between the 10th largest lender (TSB) and 11th (Skipton) got bigger – from £1.3bn to £1.9bn.
Moreover, the combined market share of the top lenders grew to nearly 85%. I think the top 10 need some increased challengers in this new market.
Specialist lenders
UK Finance report shows that the specialist lenders saw the biggest percentage drop in lending (c25%) year on year.
It was not an easy year for specialist lenders in 2020, with several making temporary withdrawals and faced capital constraints.
Despite this, most of the specialist lenders have held onto their league positions, despite many seeing their market share reduce – which is under stable given the market of 2020.
Therefore, it is hats off to them, particularly as UK Finance points out – the market needs the diversity offered by such lenders.
Aldermore is the one that fared worse, seeing their league ranking fall from 18th to 25th and a market share fall from 0.6% to 0.2%.
On the other side of the coin, Fleet saw their market share grow in 2020, albeit from a low base from 0.1% to 0.2% whilst Pepper and Keystone both saw their total lending grow by 50% last year.
More2Life
Just a quick mention of More2Life who found themselves moving up to the top 20 in 2020. Their lending volumes grew to £1bn.
What about buy-to-let lending?
Well, the big news in the buy-to-let (BTL) sector is that the Nationwide and Lloyds swapped places, with the latter now being the market leader.
Even so, both grew their market shares last year in buy to let; Lloyds just saw a bigger increase.
Building on their dominance gained in the financial crisis, these two mega-BTL-lenders command c36% of the market.
This leaves over 50 other lenders battling out for the rest; no wonder we so much rate reductions going on!
Coventry found themselves in third place in the BTL league table – but still lost market share; it was just Barclays lost more share than them.
On the whole there was not much movement in the BTL league standings. Aldermore were the only major mover – falling from 11th to 19th spot.
Meanwhile Principality fell out of the top 20, replaced by Fleet.
Building Societies
The building society sector saw the biggest fall in actual value (£10.6bn) year on year, according to UK Finance.
But this figure is a bit skewed due to Nationwide lending alone falling by £6.2bn, but most lenders in this sector did see lending fall but their positions in the league table unharmed.
I just want to point out here thought that West Bromwich and Nottingham Building Societies did see their market share grow last year. Well done them.
Overall
2020 was not a normal market but the league table shows a truer sense of normality in terms of who is positioned where, except just a few lenders whose positions fell.
Perhaps 2021 will see a few surprises in market share gains and losses and a bigger challenge on the top 10?
