CML Reports Limited Competition on UK Mortgage Market

In its latest report published on August 18th, the Council of Mortgage Lenders (CML) announced that 6 UK lenders have expanded their share of the mortgage market in the year of 2008. In 2008, the top 6 six British lenders with Lloyds Banking Group taking the 1st position, have given out 78% of all loans, which compares to 72% in 2007. According to the Council of Mortgage Lenders, it is the economic downturn that is to be blamed for the limited supply of mortgage finance. The overall amount of lending declined by 28% in 2008; moreover, a number of specialist lenders have left the market. CML is determined that the British mortgage market has lived through a series of dramatic changes as many lenders either merged or ceased their lending. According to CML, the mortgage started to change when the Northern Rock bank, which previously accounted for as much as 8% of all lending, left the top 10 of UK mortgage lenders. In the year of 2008, the bank only accounted for 1.1% of mortgage lending. Another reason for the mortgage market decline is, in the opinion of CML professionals, the fact that the market share of specialist mortgage lenders, which have not been dependent on customers’ savings, has significantly shrunk from 7% to 2%. In fact, a large number of those lenders have ceased their lending last year. Mortgage brokers claim that UK borrowers are now in the worst position ever as a limited number of lenders on the market means limited competition, which in its turn implies that the interest rates remain high. Moreover, they do not even compete for customers with each other unless borrowers can provide a 25%+ deposit. According to the Council of Mortgage Lenders, the top 6 UK lenders are: Lloyds, Santander, Nationwide, Barclays, RBS and HSBC.