Sorry for interrupting, this website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Learn more
Accept and close

Description

Description

Covered in this report

This report includes discussion of residential mortgages used for the following reasons:

  • House purchase: the loan is used to purchase a property.
  • Remortgage: where a mortgage borrower redeems his/her existing mortgage with their current lender and takes out a new mortgage on the same property.
  • Further advance: a form of additional borrowing offered by lenders to their existing mortgage customers for the purposes of home improvements or to buy a car etc. By taking out a further advance, a borrower is increasing their overall mortgage debt with the lender.

For the purposes of this report, Mintel has used the following definitions of mortgage interest rates:

  • Fixed rate: the interest payments are fixed for a set period of time, after which the borrower will be moved on to another rate, such as the lender’s standard variable rate.
  • Standard variable rate (SVR): the interest varies with the lender’s mortgage rate.
  • Tracker rate: the interest rate moves up or down by tracking an external rate, such as the Bank of England base rate or LIBOR (London Interbank Offered Rate).
  • Discounted rate: the interest rate varies with the lender’s SVR, but the rate is also discounted for a set period of time.

“Due to the economic uncertainty of Brexit, the mortgage market is going through a difficult period. Total gross mortgage lending has slowed in the past two years and will likely stagnate in 2019. However, with mortgage rates still near all-time lows, remortgage activity should remain a bright spot. The weaker housing market should also motivate first-time buyers to actively pursue opportunities to get onto the housing ladder.”

– George Zaborowski, Senior Analyst Financial Services Research

This report examines the following issues:

  • Fear of rejection may be hurting demand for mortgages
  • Automation is the key to creating a more competitive market

What's included

What's included

Table of contents

Table of contents

  1. Overview

    • What you need to know
      • Products covered in this report
      • Executive Summary

          • The market
            • Gross mortgage lending rises 3.4% in 2018
              • Figure 1: Forecast of gross mortgage lending, 2013-23
            • Most new mortgages distributed via intermediaries
              • Figure 2: Distribution of regulated mortgage sales, direct versus intermediated, 2013/14-2017/18
            • Housing price growth has stalled, but rates remain attractive
              • Figure 3: Monthly interest rate of UK monetary financial institutions (excluding Central Bank) for 2-year and 5-year fixed-rate mortgages at 75% LTV, 2-year variable-rate mortgage at 75% and standard variable-rate (SVR) mortgage, January 2013-January 2019
            • FCA publishes final report calling for better customer support
              • Companies and brands
                • Lloyds Banking Group the top mortgage lender
                  • Figure 4: Top 10 UK mortgage providers, by outstanding mortgage balances at year-end, 2018
                • Adspend rebounds in 2018
                  • Big banks respected but not always admired, while supermarkets struggle for recognition
                    • Figure 5: Attitudes towards and usage of selected brands, November 2018
                  • The consumer
                    • Three fifths of mortgage owners are on a fixed-rate deal
                      • Figure 6: Type of mortgage held, January 2019
                    • Half of borrowers with fixed-term deals say they will expire within 2 years
                      • Figure 7: Projected expiration of current mortgage deal, January 2019
                    • Most plan to seek out new deals upon expiration
                      • Figure 8: Action likely to be taken upon expiration of current mortgage deal, January 2019
                    • Half of borrowers express some concern about the impact of an interest rate rise
                      • Figure 9: Level of concern about impact of interest rate rises on mortgage affordability, January 2019
                    • Most borrowers have a good idea of how much they owe
                      • Figure 10: Agreement with select statements about current mortgage, January 2019
                    • Buying a home is a priority for one third of renters
                      • Figure 11: Attitudes and behaviour toward homeownership among renters, January 2019
                    • What we think
                    • Issues and Insights

                      • Fear of rejection may be hurting demand for mortgages
                        • The facts
                          • The implications
                            • Automation is the key to creating a more competitive market
                              • The facts
                                • The implications
                                • The Market – What You Need to Know

                                  • Gross lending grew by 3% in 2018
                                    • Remortgaging activity supporting market growth
                                      • Intermediaries further grow their share of new mortgage distribution
                                        • Housing price growth has stalled, but rates remain attractive
                                          • FCA publishes final report calling for improved customer support
                                          • Market Size and Forecast

                                            • Gross lending grew by 3% in 2018
                                              • Figure 12: Gross mortgage lending, 2014-18
                                            • Market forecast
                                              • Gross lending projected to reach £342 billion by 2023
                                                • Figure 13: Forecast of gross mortgage lending, 2013-23
                                                • Figure 14: Forecast of gross mortgage lending, at current and constant prices, 2013-23
                                              • Forecast methodology
                                              • Market Segmentation

                                                • Home purchase activity stagnates
                                                  • Figure 15: Volume of new mortgages, by purpose, not seasonally adjusted, 2014-18
                                                • Remortgaging supporting growth in market value
                                                  • Figure 16: Value of new mortgages, by purpose, not seasonally adjusted, 2014-18
                                              • Channels to Market

                                                • 71% of new mortgage sales are intermediated
                                                  • Direct sales could increase with new technology
                                                    • Figure 17: Distribution of regulated mortgage sales, direct versus intermediated, 2013/14-2017/18
                                                    • Figure 18: Distribution of regulated mortgage sales, advised versus non-advised, 2013/14-2017/18
                                                • Market Drivers

                                                  • House price growth falls to a 6-year low
                                                    • Figure 19: Annual change in average UK house prices – ONS and Nationwide house price indices, January 2011-December 2018
                                                  • Interest rates remain attractive
                                                    • Figure 20: Monthly interest rate of UK monetary financial institutions (excluding Central Bank) for 2-year and 5-year fixed-rate mortgages at 75% LTV, 2-year variable-rate mortgage at 75% and standard variable-rate (SVR) mortgage, January 2013-January 2019
                                                  • Rates have become more attractive for higher-LTV borrowers
                                                    • Figure 21: Monthly interest rate of UK monetary financial institutions (excluding Central Bank) for 2-year and 5-year fixed-rate mortgages at 95% LTV, January 2014-January 2019
                                                  • Building activity is up but still short of what is needed
                                                    • Figure 22: Number of permanent dwellings started and completed, 2006/07-2017/18
                                                • Regulatory and Legislative Changes

                                                  • FCA publishes mortgages market study final report
                                                    • Consumers need more effective support when choosing a mortgage
                                                      • Proposed remedies aim to make shopping around and switching easier
                                                        • FCA publishes “mortgage prisoner” consultation paper
                                                          • First-time buyer stamp duty relief extended to shared ownership property
                                                          • Companies and Brands – What You Need to Know

                                                            • Lloyds Banking Group the top mortgage lender
                                                              • Lenders keeping rates competitive and catering to FTBs
                                                                • Adspend bounces back in 2018
                                                                  • Big banks respected but not always admired
                                                                  • Market Share

                                                                    • Lloyds Banking Group is the UK’s largest lender
                                                                      • Figure 23: Top 10 UK mortgage providers, by outstanding mortgage balances at year-end, 2016-18
                                                                    • Large banking groups and Nationwide maintain market dominance
                                                                      • Coventry sees strong growth while TSB falters
                                                                      • Competitive Strategies

                                                                        • Lenders keeping rates competitive
                                                                          • More first-time buyer friendly products being launched
                                                                            • Lenders starting to integrate open banking into the application process
                                                                              • Mortgage products with higher age limits on the rise
                                                                              • Advertising and Marketing Activity

                                                                                • Above-the-line adspend rebounds in 2018…
                                                                                  • …driven by brand building activity
                                                                                    • Figure 24: Total above-the line, online display and direct mail advertising expenditure on mortgages, excluding equity release, year to November 30, 2016-18*
                                                                                  • Amount spent on digital ads doubles to over £8 million in 2018
                                                                                    • Figure 25: Total above-the-line, online display and direct mail advertising expenditure on mortgages, excluding equity release, by media type, Year to November 30, 2016-18**
                                                                                  • Halifax fortifies its position as the leading advertiser of mortgages
                                                                                    • Figure 26: Top 10 advertisers of above-the-line, online display and direct mail advertising expenditure on mortgages, excluding equity release, year to November 30, 2016-18
                                                                                  • Online brokers Habito and Trussle launch brand building campaigns
                                                                                    • Nielsen Ad Intel coverage
                                                                                    • Brand Research

                                                                                        • Brand map
                                                                                          • Post office and Nationwide score high for trust
                                                                                            • Figure 27: Attitudes towards and usage of selected brands, November 2018
                                                                                          • Key brand metrics
                                                                                            • Nationwide is most likely to recommended
                                                                                              • Figure 28: Key metrics for selected brands, November 2018
                                                                                            • Brand attitudes: Supermarket brands struggle to be seen as reputable
                                                                                              • Figure 29: Attitudes, by brand, November 2018
                                                                                            • Brand personality: Post Office and Nationwide are the most fun and ethical brands
                                                                                              • Figure 30: Brand personality – macro image, November 2018
                                                                                            • Affordability the key attribute for supermarket brands
                                                                                              • Figure 31: Brand personality – micro image, November 2018
                                                                                            • Brand analysis
                                                                                              • Big banks are respected but not necessarily admired
                                                                                                • A tale of two building societies – Nationwide and Coventry
                                                                                                  • Most challengers still facing an uphill battle for recognition
                                                                                                  • The Consumer – What You Need to Know

                                                                                                    • One in four UK adults has a mortgage
                                                                                                      • Three in four borrowers have a fixed-rate loan
                                                                                                        • Half on fixed-term deals say they will expire within 2 years
                                                                                                          • Most with deals due to expire soon will seek out new deals
                                                                                                            • More than half express concern about the impact of interest rate rises
                                                                                                              • Most claim to have a good idea of how much they owe
                                                                                                                • One third of renters say buying a home is a priority
                                                                                                                • Mortgage Ownership

                                                                                                                  • One in four UK adults has a mortgage
                                                                                                                    • A third live in rented accommodation
                                                                                                                      • Figure 32: Current housing situation, January 2019
                                                                                                                    • 35-54s are the most likely to own their home with a mortgage
                                                                                                                      • Figure 33: Mortgage ownership, by age, January 2019
                                                                                                                    • City dwellers the least likely to have a mortgage
                                                                                                                      • Figure 34: Homeownership versus renting, by region, January 2019
                                                                                                                  • Type of Mortgage Held

                                                                                                                    • Three in five mortgage holders have a fixed rate loan
                                                                                                                      • Figure 35: Type of mortgage held, January 2019
                                                                                                                    • SVRs most common among older mortgage holders
                                                                                                                      • Figure 36: Type of mortgage held, by age, January 2019
                                                                                                                  • Expiration of Current Mortgage Deal

                                                                                                                    • Half of fixed-term deals due to expire within the next 2 years
                                                                                                                      • Figure 37: Expected expiration of current mortgage deal, January 2019
                                                                                                                    • Younger borrowers more likely to be nearing the end of product term
                                                                                                                      • Figure 38: Expected expiration of current mortgage deal, by age, January 2019
                                                                                                                    • Most with deals set to expire soon plan to renew or refinance
                                                                                                                      • Figure 39: Action likely to be taken upon expiration of current mortgage deal, January 2019
                                                                                                                    • Still more can be done to encourage borrowers to seek out better deals
                                                                                                                      • Shopping around as we know it set to become a thing of the past
                                                                                                                      • Level of Concern about Interest Rate Rises and Mortgage Affordability

                                                                                                                        • Half are very or somewhat concerned about impact of interest rate rises
                                                                                                                          • Figure 40: Level of concern about impact of interest rate rises on mortgage affordability, January 2019
                                                                                                                        • Level of concern highest among younger borrowers
                                                                                                                          • Figure 41: Level of concern about impact of interest rate rises on mortgage affordability, by age, January 2019
                                                                                                                        • Concern motivates borrowers to act
                                                                                                                          • Figure 42: Level of concern about impact of interest rate rises on mortgage affordability, by Action likely to be taken upon expiration of current mortgage deal, January 2019
                                                                                                                        • Uncertainty offers brokers an opportunity to demonstrate value
                                                                                                                        • Current Mortgage Situation and Planned Activity

                                                                                                                          • Most borrowers have a good idea of how much they have left to pay
                                                                                                                            • Figure 43: Agreement with statements about current mortgage, January 2019
                                                                                                                          • Three fifths on a variable rate have experienced rising costs in last year
                                                                                                                            • Figure 44: Agreement with select statements about current mortgage, by mortgage type, January 2019
                                                                                                                          • 30% of under-35s planning on borrowing additional funds
                                                                                                                            • Figure 45: Agreement with select statements about current mortgage, by age, January 2019
                                                                                                                        • Attitudes and Behaviour toward Homeownership among Renters

                                                                                                                          • Buying a home a priority for a third of renters
                                                                                                                            • Figure 46: Attitudes and behaviour toward homeownership among renters, January 2019
                                                                                                                          • Two fifths of under-35s are actively saving for a deposit
                                                                                                                            • Figure 47: Agreement with select statements about homeownership among renters, by age, January 2019
                                                                                                                          • Fear of rejection may be preventing many from realising their dreams
                                                                                                                          • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                                                              • Abbreviations
                                                                                                                                • Consumer research methodology
                                                                                                                                • Appendix – Market Size and Forecast

                                                                                                                                    • Figure 48: Best- and worst-case forecast of gross mortgage lending, 2018-23
                                                                                                                                  • Forecast methodology

                                                                                                                                  About the report

                                                                                                                                  This report will give you a complete 360-degree view of your market. Not only is it rooted in robust proprietary and high-quality third-party data, but our industry experts put that data into context and you’ll quickly understand:

                                                                                                                                  • The Consumer

                                                                                                                                    What They Want. Why They Want It.

                                                                                                                                  • The Competitors

                                                                                                                                    Who’s Winning. How To Stay Ahead.

                                                                                                                                  • The Market

                                                                                                                                    Size, Segments, Shares And Forecasts: How It All Adds Up.

                                                                                                                                  • The Innovations

                                                                                                                                    New Ideas. New Products. New Potential.

                                                                                                                                  • The Opportunities

                                                                                                                                    Where The White Space Is. How To Make It Yours.

                                                                                                                                  • The Trends

                                                                                                                                    What’s Shaping Demand – Today And Tomorrow.

                                                                                                                                  Please Note: This is a sample report. All of the figures, graphs, and tables have been redacted.

                                                                                                                                  Trusted by companies. Big and small.

                                                                                                                                  • bell
                                                                                                                                  • boots
                                                                                                                                  • google
                                                                                                                                  • samsung
                                                                                                                                  • allianz
                                                                                                                                  • kelloggs
                                                                                                                                  • walgreens
                                                                                                                                  • redbull
                                                                                                                                  • unilever
                                                                                                                                  • Harvard
                                                                                                                                  • pinterest
                                                                                                                                  • new-york-time