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Mortgage Lending in the UK Key Trends and Opportunities to 2018 On 3rd June 2014

Synopsis • • • • •

The report provides market analysis, information and insights into the UK mortgage lending market It provides a snapshot of market size and market segmentation It offers a comprehensive analysis of gross lending, approvals, balances outstanding, housing market drivers and market outlook It analyzes distribution channels It outlines deals, news and regulatory developments

Summary Mortgage lending activity continued to grow during the recessionary review period, with gross lending rising at a compound annual growth rate (CAGR) of 5.24% during the review period (20092013), to a five-year high of GBP176.4 billion in 2013. The balance outstanding on a book of 13.96 million UK mortgage accounts stood at GBP1.28 trillion at the end of 2013. Despite the contraction in economic growth, slow earnings growth, and a rise in unemployment and redundancies during the review period, demand for mortgages was supported by first-time buyers and buy-to-let investors. First-time buyers benefited from ongoing policy stimuli in the form of Help to Buy equity loans and a portion of high loan-to-value mortgages underwritten by the government. Buy-to-let lending was fuelled by easy access to interest-only loans and high yields in the rental market. Mortgage affordability eased during the recession as the Bank of England reduced its policy interest rate to a record-low of 0.5% in 2009, and Funding for Lending provided 18 months of access to cheap bank finance. This prompted retail lenders to lower interest rates on tracker and fixed-rate mortgages during the review period, leading to lower-value loan repayments from 2009 onwards. At the same time, however, the availability of mortgages was stifled by a Email ID- contact@jsbmarketresearch.com Tel No- 91 2241236650 Published by- http:/www.jsbmarketresearch.com/


heightened wariness towards risk. Mortgages of over 95% loan-to-value accounted for just 0.5% of new approvals in 2013, compared to 5.7% in 2007. Help to Buy is expected to be the primary driver of mortgage demand over the forecast period, but remains dependent on the governments allocated funding lasting until the scheduled 2020 end date. The scheme has re-opened the market for buyers with small deposits and reinvigorated demand from home movers. Favorable government policy towards self-build projects, higher social housing tenant discounts for Right to Buy, and the inclusion of Shariacompliant products in Help to Buy will aid the development of niche mortgage lending categories. Gross mortgage lending is forecast to rise at a CAGR of 6.11% over the forecast period (20142018), increasing balances outstanding to GBP1.35 billion in 2018. While the immediate ability to repay mortgages is assisted by low interest rates, a tightening of monetary policy is inevitable as economic growth gains pace. Existing borrowers on fixed-rate deals will be protected against initial interest rate rises expected in late-2015, but concern over the affordability of repayments under a higher interest-rate scenario led the Financial Conduct Authority (FCA) to introduce remedial measures in the conclusion of its Mortgage Market Review in April 2014. Mortgage applicants will be subject to greater financial scrutiny, and stress tested against a rise in borrowing costs, potentially increasing delays and rejections, and impairing sentiment towards the home-buying process. Growth in interest-only mortgage lending will be driven by the unregulated buy-to-let side of the market, as a ban on the self-certification of income and the requirement for a credible capital repayment plan is likely to deter homebuyers. The mortgage market will also have to contend with the withdrawal of Funding for Lending and a growing preference for renting, as well as the prospect of an International Monetary Fund (IMF)-approved cap on mortgage loanto-value ratios, a move which has not been ruled out by Bank of England policymakers in the event of a nationwide housing market bubble.

Scope • • • • •

This report provides market analysis, information and insights into the UK mortgage lending market It provides a global snapshot of market size It analyzes drivers and the outlook for the market It provides information on distribution channels It covers deals, news and regulatory developments

Reasons To Buy • •

Gain an understanding of the UK mortgage lending market size Learn about the performance of market drivers and distribution channels

Email ID- contact@jsbmarketresearch.com Tel No- 91 2241236650 Published by- http:/www.jsbmarketresearch.com/


• •

Understand the competitive landscape in terms of market share and product innovation Find out more on key deals and recent developments in the market

Key Highlights Growth in mortgage lending continued during the UK recession Lackluster labor market conditions were outweighed by policy stimulus Record-low interest rates resulted in more affordable repayments Help to Buy will underpin demand for mortgages over the forecast period The prospect of higher interest rates poses a threat to stability Downside risk is intensified by Mortgage Market Review (MMR) bans and policy response in the event of a housing bubble

Other industries we cover: • • • • • • • • •

Advertising and Media Automotive and Parts Consumer Goods Healthcare and Medical Finance and Banking Food and Beverages Travel and Tourism Textiles and Clothing SWOT Analysis

Table of Content 1 Summary 2 Introduction 2.1 What is this Report About? 2.2 Definitions 2.3 Methodology 3 Market Analysis 3.1 Market Size 3.2 Gross Lending 3.2.1 By lender 3.2.2 By purpose 3.3 Repayments 3.4 Mortgage Approvals 3.4.1 By value 3.4.2 By volume Email ID- contact@jsbmarketresearch.com Tel No- 91 2241236650 Published by- http:/www.jsbmarketresearch.com/


3.4.3 Loan-to-value ratio 3.4.4 Repayment and interest-only mortgages 3.5 Mortgage Arrears 3.6 Interest Rates 3.7 Market Outlook 3.8 Distribution Channels 4 Economic Backdrop 4.1.1 Real GDP growth 4.1.2 Labor market conditions 4.1.3 Housing market 4.1.4 Disposable income 4.1.5 Interest rates 5 Competitive Landscape 5.1 Market Shares 5.2 Mortgage Interest Rates 5.3 Mortgage Innovation 5.4 Mortgages SWOT Analysis 6 Porters Five Forces Analysis 6.1 Bargaining Power of Suppliers: MediumHigh 6.2 Bargaining Power of Buyers: Low 6.3 Barriers to Entry: MediumHigh 6.4 Intensity of Rivalry: High 6.5 Threat of Substitution: Medium 7 Regulation and Policy 7.1 Recent Changes 7.1.1 Help to Buy 7.1.2 Mortgage Market Review (MMR) 7.2 Upcoming Regulations 7.2.1 Enhanced Product Sales Data requirements 7.2.2 Mortgage Credit Directive 7.2.3 Basel III 8 Deals 8.1 Post Office Opens Intermediary Distribution Channel 8.2 Lloyds Banking Group Prepares to Float TSB 8.3 Yorkshire Building Society Prices Euro Bond 8.4 Nationwide Building Society Prices Offering Due in 2019 Email ID- contact@jsbmarketresearch.com Tel No- 91 2241236650 Published by- http:/www.jsbmarketresearch.com/


9 News 9.1 Metro Bank Launches Online Mortgage System 9.2 Nationwide Launches Video Link Mortgage Consultant Service 9.3 One in 20 Brits Borrow to Make Rent or Mortgage Payments 9.4 Higher Loan-to-Value Mortgages in Demand 9.5 Mortgage Intermediaries Believe Help to Buy Will be Curtailed 9.6 RICS Recommends Lenders Pay for Valuations 10 UK Retail Banks 10.1 Barclays Plc Company Overview 10.1.1 Barclays Plc profile 10.1.2 Barclays Plc main mortgage products 10.1.3 Barclays Plc main competitors 10.1.4 Barclays Plc board of directors 10.2 HSBC Bank Plc Company Overview 10.2.1 HSBC Bank Plc profile 10.2.2 HSBC Bank Plc main mortgage products 10.2.3 HSBC Bank Plc main competitors 10.2.4 HSBC Bank Plc board of directors 10.3 Lloyds Banking Group Plc Company Overview 10.3.1 Lloyds Banking Group Plc profile 10.3.2 Lloyds Banking Group Plc main mortgage products 10.3.3 Lloyds Banking Group Plc main competitors 10.3.4 Lloyds Banking Group Plc board of directors 10.4 Nationwide Building Society Company Overview 10.4.1 Nationwide Building Society profile 10.4.2 Nationwide Building Society main mortgage products 10.4.3 Nationwide Building Society main competitors 10.4.4 Nationwide Building Society board of directors 10.5 Santander UK Plc Company Overview 10.5.1 Santander UK Plc profile 10.5.2 Santander UK Plc main mortgage products 10.5.3 Santander UK Plc main competitors 10.5.4 Santander UK Plc board of directors 10.6 The Royal Bank of Scotland Group Company Overview 10.6.1 The Royal Bank of Scotland Group Plc profile 10.6.2 The Royal Bank of Scotland Group Plc main mortgage products Email ID- contact@jsbmarketresearch.com Tel No- 91 2241236650 Published by- http:/www.jsbmarketresearch.com/


10.6.3 The Royal Bank of Scotland Group Plc main competitors 10.6.4 The Royal Bank of Scotland Group Plc board of directors 11 Statistics 11.1 Review Period: 20092013 11.2 Forecast Period: 20142018 12 Appendix 12.1 Methodology 12.2 Contact Timetric 12.3 About Timetric 12.4 Timetrics Services 12.5 Disclaimer List of Tables Table 1: Mortgage Market Definitions Table 2: The UK Mortgage Market Summary (GBP Billion), 20092013 Table 3: The UK Mortgage Market Competitor APR (%), Financial Year 2014/15 Table 4: The UK Mortgage Market SWOT Analysis Table 5: Recent and Upcoming Regulatory Changes Table 6: Barclays Plc, Key Facts Table 7: Barclays Plc, Main Mortgage Products Table 8: Barclays Plc, Board of Directors Table 9: HSBC Bank Plc, Key Facts Table 10: HSBC Bank Plc, Main Mortgage Products Table 11: HSBC Bank Plc, Board of Directors Table 12: Lloyds Banking Group Plc, Key Facts Table 13: Lloyds Banking Group Plc, Main Mortgage Products Table 14: Lloyds Banking Group Plc, Board of Directors Table 15: Nationwide Building Society, Key Facts Table 16: Nationwide Building Society, Main Mortgage Products Table 17: Nationwide Building Society, Board of Directors Table 18: Santander UK Plc, Key Facts Table 19: Santander UK Plc, Main Mortgage Products Table 20: Santander UK Plc, Board of Directors Table 21: The Royal Bank of Scotland Group Plc, Key Facts Table 22: The Royal Bank of Scotland Group Plc, Main Mortgage Products Email ID- contact@jsbmarketresearch.com Tel No- 91 2241236650 Published by- http:/www.jsbmarketresearch.com/


Table 23: The Royal Bank of Scotland Plc, Board of Directors Table 24: The UK Mortgages Market (GBP Billion), 20092013 Table 25: The UK Mortgages Market (GBP Billion), 20142018 List of Figures Figure 1: UK Mortgages Balance Outstanding (GBP Billion), 20072013 Figure 2: UK Mortgages Outstanding Mortgage Loan Accounts (Million), 20072013 Figure 3: UK Mortgages Gross Lending (GBP Billion), 20082013 Figure 4: UK Mortgages Gross Lending by Lender (GBP Billion), 20082013 Figure 5: UK Mortgages Share of Gross Lending by Purpose (%), 2013 Figure 6: UK Mortgages Gross Lending for House Purchases (GBP Billion), 20072013 Figure 7: UK Mortgages Repayments (GBP Billion), 20082013 Figure 8: UK Mortgages Net Lending (GBP Billion), 20082013 Figure 9: UK Mortgages Approvals by Value (GBP Billion), 20082013 Figure 10: UK Mortgages Approvals by Value Breakdown (GBP Billion), 20082013 Figure 11: UK Mortgages Approvals by Volume (Thousands), 20082013 Figure 12: UK Mortgages Approvals by Volume Breakdown (Thousands), 20082013 Figure 13: UK Mortgages Approvals by Loan-to-Value (%), 20072013 Figure 14: UK Mortgages Repayment and Interest-Only Advances (%), 20072013 Figure 15: UK Mortgages Outstanding Arrears Cases (GBP Billion), 20072013 Figure 16: The UK New Cases of Lender Repossessions, 20082013 Figure 17: The UK Average Mortgage Interest Rates (%, End-year), 20082013 Figure 18: The UK Regional House Prices (GBP), 20072013 Figure 19: UK Mortgages Gross Lending (GBP Billion), 20142018 Figure 20: UK Mortgages Balances Outstanding (GBP Billion), 20142018 Figure 21: The UK Retail Savings Market Growth Dynamics (%), 20092018 Figure 22: The UK Mortgage Distribution Channels, 20052012 Figure 23: The UK Real GDP Growth (%), 20082018 Figure 24: The UK Unemployment and Redundancy Rates (%), 20042012 Figure 25: The UK Average Weekly Earnings (GBP), 20042013 Figure 26: The UK Housing Construction Growth (%), 20042013 Figure 27: The UK Average House Prices (GBP), 20042013 Figure 28: The UK Average House Prices by Type of Buyer (GBP), 20042013 Figure 29: The UK Annual House Price-to-Earnings Ratio (%), 20042013 Figure 30: The UK Household Disposable Income (GBP), 19972013 Figure 31: The UK Bank of England Rate (%), 20042014 Email ID- contact@jsbmarketresearch.com Tel No- 91 2241236650 Published by- http:/www.jsbmarketresearch.com/


Figure 32: Mortgage Balances Outstanding Market Shares of the 10-Largest Mortgage Lenders in the UK (%), 2013 Figure 33: Mortgage Gross Lending Market Shares of the 10-Largest Mortgage Lenders in the UK (%), 2013 Figure 34: The UK Mortgage Market Five Forces Analysis Figure 35: The UK Banking Regulatory Framework Related reports: Amica Mutual Insurance Company : Company Profile and SWOT Analysis 1st Colonial Bancorp, Inc. (FCOB) : Company Profile and SWOT Analysis

About JSB Market Research:JSB market research is a leading player in the market of research report distribution. It is one-stop-shop for all information related to market research for any sector of the industry. Along with providing in-depth analysis though reports, JSB market research also provides regular updates of the market though newsletters. Our reports are a well-researched work of market researchers with an extensive knowledge and a good level of market experience. To know more on Mortgage Lending in the UK Key Trends and Opportunities to 2018 http://www.jsbmarketresearch.com/finance-banking/r-Mortgage-Lending-in-the-UK-KeyTrends-and-Opportunities-to-2018-112263

Email ID- contact@jsbmarketresearch.com Tel No- 91 2241236650 Published by- http:/www.jsbmarketresearch.com/

JSB Market Research - Mortgage Lending in the UK Key Trends and Opportunities to 2018  

The "Mortgage Lending in the UK Key Trends and Opportunities to 2018"report provides market analysis, information and insights into the UK m...

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