Lloyds loses mortgage market share as HSBC and RBS rise
Lloyds lost market share in UK mortgages last year as Royal Bank of Scotland (RBS), HSBC and a host of challengers gained, according to new data published today.
Competitors to Lloyds bit off almost one per cent of their market share, which fell from 22.1 per cent to 21.2 per cent of mortgage balances outstanding in 2017, the data from industry body UK Finance show.
RBS leapfrogged Barclays to become the fourth biggest lender, after growing mortgage balances by almost seven per cent to reach £136.3bn.
Lloyds enjoys a dominant position in the UK mortgage market, a legacy from its financial crisis-era merger with HBos, the umbrella company for Halifax and Bank of Scotland. However, the new data, which cover 97 per cent of the UK market, also illustrate the rapid growth of challenger bank and building society competitors to Lloyds and the rest of the "Big Six".
UK mortgage market shares
| Lender | Rank 2017 | Balances 2017 | Market share 2017 | Rank 2016 | Balances 2016 | Market share 2016 |
| Lloyds Banking Group | 1 | 290.3 | 21.2% | 1 | 293.0 | 22.1% |
| Nationwide BS | 2 | 176.0 | 12.9% | 2 | 171.4 | 12.9% |
| Santander UK | 3 | 154.3 | 11.3% | 3 | 153.6 | 11.6% |
| Royal Bank of Scotland | 4 | 136.3 | 10.0% | 5 | 127.7 | 9.6% |
| Barclays | 5 | 131.3 | 9.6% | 4 | 127.9 | 9.7% |
| HSBC Bank | 6 | 82.2 | 6.0% | 6 | 76.3 | 5.8% |
| Coventry BS | 7 | 35.8 | 2.6% | 8 | 32.8 | 2.5% |
| Yorkshire BS | 8 | 34.0 | 2.5% | 7 | 32.9 | 2.5% |
| Virgin Money | 9 | 33.5 | 2.5% | 9 | 29.6 | 2.2% |
| TSB Bank | 10 | 28.1 | 2.1% | 10 | 26.8 | 2.0% |
| Clydesdale Bank plc | 11 | 23.9 | 1.7% | 12 | 22.1 | 1.7% |
| Bank of Ireland | 12 | 19.9 | 1.5% | 13 | 20.3 | 1.5% |
| Skipton BS | 13 | 15.1 | 1.1% | 15 | 13.9 | 1.0% |
| Leeds BS | 14 | 14.8 | 1.1% | 16 | 13.0 | 1.0% |
| Co-operative Bank plc | 15 | 14.7 | 1.1% | 14 | 16.8 | 1.3% |
| Bradford & Bingley plc | 16 | 10.3 | 0.8% | 11 | 22.6 | 1.7% |
| Paragon Group | 17 | 9.8 | 0.7% | 17 | 9.5 | 0.7% |
| Northview Group | 18 | 8.8 | 0.6% | 18 | 9.2 | 0.7% |
| Aviva Equity Release | 19 | 7.9 | 0.6% | 20 | 7.2 | 0.5% |
| NRAM plc | 20 | 7.4 | 0.5% | 19 | 8.6 | 0.6% |
Lloyds' total share declined as RBS and HSBC pushed on (Source: UK Finance)
The rate of increase in total lending slowed from 11 per cent in 2016 to four per cent year-on-year in 2017, hitting a total of £257bn. Growth in new lending was strongest amongst lenders ranked 21-30 in 2017, UK Finance said. The smaller lenders lent £3bn more for mortgages than the equivalent group in 2016 – a growth rate of 40 per cent.
Virgin Money, Leeds Building Society, Principality Building Society, and One Savings Bank all grew their mortgage balance sheets by well over 10 per cent during the year, while Metro Bank's mortgage lending was 50 per cent higher than the previous year, increase its market share of outstanding balances by 0.19 percentage points.
Meanwhile, HSBC grew its market share by 0.25 percentage points, an increase of almost eight per cent year-on-year. HSBC's chief executive, John Flint, has targeted further growth in the bank's mortgage book after taking over the bank earlier this year.
Read more: Top Bank of England official warns of risks building in UK mortgage market