That’s according to UK Finance’s annual rundown of the largest mortgage lenders, which revealed no change to the top five in 2019.

The data showed Lloyds coming in on top of the list with a 17.2% market share and £46 billion of gross lending in 2019.

Nationwide followed hot on its heels in second place with 12.6% of the market share and £33.7 billion of lending. NatWest, Santander and Barclays took third, fourth and fifth spots respectively.

Overall gross lending totalled £268 billion, which is a decrease of 0.3% on 2018. Banks increased their share by 4% but building societies, overall, reduced their portion of the market by more than 5% dropping £1.8 billion.

Mid-tier lenders’ share shrunk over 10% or £3.5 billion.

Buy-to-let

But when it came to buy-to-let Nationwide took the top spot for gross lending with Lloyds coming in at second – switching positions from 2018.

According to the data, Nationwide occupied 15.6% of the buy-to-let market which amounted to £6.6 billion of gross lending. This compared to an 11.1% market share in 2018 and £4.48 billion of gross lending.

Lloyds took 11.95% of the market with £5.02 billion of gross lending. This compared to 13.7% and £5.53 billion respectively in 2018.

Barclays, OneSavings Bank and Coventry took the third, fourth and fifth places for lending to landlords – no change from 2018.

Overall buy-to-let gross lending totalled £42.2 billion – an increase of 4.2% on 2018.

Specialist lenders

While the top five lenders jointly secured over 63% of the market share in 2019, the specialist lenders demonstrated they were no pushover.

This was particularly obvious in the buy-to-let sector and also in areas where manual underwriting was important.

Callum Bilbe, data and research analyst at UK Finance said: “Specialist lenders continue to thrive in market segments where manual underwriting is required, such as for self-employed customers or those with more complex incomes.

“Larger, and to some extent mid-sized firms, are less able to compete in these segments as their largely automated systems are unable to provide the tailored approach to these loans that is required.”

Growth in lending by lender type 2018 to 2019 (Source: UK Finance)

Ring fencing

Bilbe suggested a possible explanation for the growth of large banks could be the decline in lending from direct competitors, which coincided with the introduction of ring fencing at the beginning of 2019.

This is where big banks were required to separate their core retail banking businesses from other areas, such as investment. This limited what they could do with customer deposits.

With deposits higher than lending levels, these banks had more money ring fenced to increase mortgage lending – something which allowed them to become more competitive.

Bilbe said: “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.”