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Figures from big six lenders tell their own story

Four of the top six lenders experienced a rise in gross lending last year and experts predict continued growth this year, albeit levelling out

The top six mortgage lenders in the UK have posted their figures for 2013, providing further proof of the booming UK housing market.

Nationwide last week revealed its full-year results, with gross mortgage lending up 31 per cent from £21.5bn in 2012 to £28.1bn in 2013.

The release means four of the the UK’s six biggest banks and building societies have reported a rise in year-on-year gross lending.

Lloyds Banking Group saw a 40 per cent rise in 2013, from £26.2bn in 2012 to £36.9bn in 2013, while Santander increased lending from £14.4bn to £18.4bn during the same period.

Royal Bank of Scotland was the other lender in the top six to increase mortgage lending in 2013, with a final amount of £14.3bn representing a 3 per cent increase from £13.9bn in 2012.

However, Barclays and HSBC both saw a fall in lending. Barclays posted £17.1bn for 2013, down from £18.2bn, while HSBC saw lending 

fall from £16.4bn in 2012 to £14.4bn last year.

Enness Private Clients managing director Hugh Wade-Jones says: “It is an age-old debate about HSBC. As lenders have been preparing for the Mortgage Market Review, more transactions are going through brokers and, of course, HSBC is a direct–only lender. It will have had to change a lot of its internal processes and systems so it is probably understandable that it has seen a decline.

“On the other hand, Barclays has a huge branch network and obviously a lot of staff will have had to be trained to advise, while the bank has also made changes to its broker channel.”

Blue Strawberry Mortgages managing director Ross Robinson adds: “HSBC, as a direct lender, will have had to make some really significant changes to its processes in response to the MMR. The new regulations may have only come in a month or so ago but the talks have obviously been going on for some time. So over 2013, I would expect HSBC to have slowed down its business slightly.”

FTB and B2L lending

The latest figures also show which lenders took the biggest share of first-time buyer and buy-to-let lending. Lloyds Banking Group advanced 80,000 mortgages to first-time buyers in 2013, worth a total of £9.7bn. This is a rise from 55,000 mortgages worth £6bn in 2012.

Meanwhile, Nationwide also inc-reased its first-time buyer lending, granting 58,100 mortgages last year compared with 42,500 in 2012. The building society declined to provide a total value for the loans.

Santander lent £3.7bn to first-timers in 2013, equivalent to 20 per cent of its total gross lending. The bank does not have figures for the number of first-time buyer loans nor comparative figures for 2012.

HSBC lent 30,000 mortgages to first-time buyers in 2013, worth £3.8bn and  down by 24 per cent from £5bn in 2012. 

Barclays and RBS do not provide separate figures for lending to first-time buyers.

In terms of buy-to-let, Nationwide lent £3.7bn in 2013, up 12 per cent from £3.3bn in 2012. 

Santander advanced £552m in buy-to-let loans, equivalent to 3 per cent of the bank’s total gross lending. It does not have comparative figures for 2012. Lloyds advanced £6.9bn in buy-to-let mortgages compared with £4bn for 2012 but HSBC, RBS and Barclays do not give separate figures for this category of lending.

Wade-Jones says: “Obviously the market is flying at the moment so increases in gross lending do not come as a shock.

“I do not think we can expect this kind of activity to go on forever but I do not think there will be a rapid pullback either. 

“I would expect to see growth again next year from most of the big lenders.

“Santander in particular has been very competitive in terms of the products it has brought to market during the past 18 months so I am not surprised to see its lending figures going up.”

Robinson agrees. He says: “Santander has had some great products on offer but it has not been good in terms of service, so it balances out. Clearly the market is in an upward trend at the moment and as a result, most lenders will naturally grow their business.”

Many regarded last year as a turning point for the mortgage market although the Government is considering measures to ease growth.

Brokers believe lending figures will rise again this year before an increase in the Bank of England base rate, widely expected to come by early 2015. 

Wade-Jones says: “Of course there are talks of bubbles but in many parts of the country property prices are only just starting to move in the right direction or gather steam. 

“Confidence is rising in the market and buyers know rates will not get much lower so I would expect to see growth again this year – it just might not be as large an increase.”

Intermediary Mortgage Lenders Association chairman Charles Haresnape says: “Of course a lot of buyers have been waiting to get on the property ladder since the recession but that does not last forever. 

“Things will stabilise naturally and growth will be at a more normal rate so I would not expect to see gross lending increases of up to 40 per cent too often.”

In numbers:

40%

The year-on-year rise in gross lending seen by Lloyds Banking Group

£28.1bn

Nationwide’s total gross mortgage lending for 2013

20%

The proportion of gross lending Santander advanced to first-time buyers

£14.4bn

HSBC’s total gross mortgage lending for 2013

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