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Who’s the new mortgage king?

This week has seen the start of the half year results period for banks as well as the start of the battle for who will be the new king of the mortgage market.

Tuesday saw Abbey kick off the results season with news that it had grabbed a massive 25.6 per cent share of the net lending mortgage market.

This takes its total to £8.3bn, more than double its share in the same period last year.

In its first half year results, the lender also revealed that it now has an estimated gross mortgage lending market share of 12.9 per cent, taking its half year figure to £19.5bn, 16 per cent higher than the same time last year.

Much has been written about Abbey this year due to it being one of the only banks to end up largely unaffected from the sub-prime crisis. Brokers have also largely heralded the firm for being one of the more aggressive and competitive players in the market this year when many lenders have pulled back.

But it wasn’t only just Abbey that had net lending figures to shout about. Lloyds TSB took a 24.4 per cent share of new mortgages in the first half of this year compared to just 8.9 per cent in the same period last year.

Its gross mortgage lending increased by 5 per cent to £16.8bn, up from £16bn in the first half of 2007. This will see its share of gross lending jump 11.3 per cent, compared to 9 per cent last year.

But unfortunately for Lloyds TSB this pick up in its share of the mortgage market wasn’t enough to keep its profits up. The bank has seen its statutory profit before tax plummet by 70 per cent to £599m, down from £1,993m last year.

It says this decrease in its profits was largely due to the impact of market dislocation and adverse volatility relating to the group’s insurance business.

Alliance & Leicester’s results also revealed further woes for lenders. The bank revealed a 99 per cent fall in profits for the first half of this year. It recorded profits of just £2m, down from £290m in June 2007. It blames the huge decline in profits on treasury losses in the first four months of the year and by high funding costs.

So how did the mighty lending giant HBOS fare? Following Abbey’s huge growth in net lending this year, brokers noted that HBOS must now be quaking in their boots.

The lender revealed that it had not been as successful as its rivals in terms of the mortgage market this year. Its net mortgage lending dropped to just 7 per cent in the first half of 2008, down from 22 per cent in the last six months of 2007.

This recent slump sees it return to the levels of the first half of 2007 after a new pricing strategy for retention business backfired.

But HBOS says it still has an estimated 20 per cent share of the gross lending mortgage market.

Although HBOS looks set to remain the UK’s largest mortgage lender, Abbey’s parent company Santander will give the company a good run for its money particularly after its acquisition of Alliance & Leicester goes ahead.


HBOS sees net mortgage lending drop to 7%

HBOS has seen its net mortgage lending drop to 7 per cent in the first half of 2008 as it also reveals its profit after tax plummeted 56 per cent to £950m from £2,139m last year.


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