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Description

Description

“The mortgage market is in a healthy state but still faces a number of challenges, from the need to increase housing stock, to increasing regulatory requirements and Brexit. Crucially though, consumers have a healthy appetite for mortgages, giving plenty of opportunities to incumbents and challengers alike.”
– Rich Shepherd, Senior Financial Services Analyst

This Report discusses the following key topics:

  • Fixed-rate loans will grow further in popularity in uncertain times
  • High-quality online channels are essential to stave off disruptors
  • Assistance for first-time buyers must continue post-Help to Buy

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 reached £245.4 billion in 2016
              • Figure 1: Forecast of gross mortgage lending, 2011-21
            • Companies and brands
              • Lloyds Banking Group is the UK’s biggest mortgage provider
                • Figure 2: Mortgage market share, by gross new mortgage lending, 2016
              • Britain’s leading banks carry accusations of being solely profit-driven
                • Figure 3: Attitudes towards and usage of selected brands, December 2016
              • The consumer
                • Consumers are split over how Brexit will affect home buying
                  • Figure 4: Consumer attitudes towards the effects of Brexit on home ownership, December 2016
                • A third of adults have a mortgage
                  • Figure 5: Mortgage ownership, December 2016
                • 52% of mortgage holders have a fixed-rate loan
                  • Figure 6: Type of mortgage owned, December 2016
                • 28% of mortgages were arranged in the last year
                  • Figure 7: Timing of last mortgage, December 2016
                • Online is a key site of mortgage research, but people prefer to apply in person
                  • Figure 8: Methods used for/interested in using for researching and arranging a mortgage product, December 2016
                  • Figure 9: Methods used for/interested in using for administering a mortgage product, December 2016
                • A tenth of non-homeowners plan to buy a property in the next two years
                  • Figure 10: Intentions to buy a property in the next two years, December 2016
                • A quarter of Millennials anticipate needing to move elsewhere to buy
                  • Figure 11: Renters’ attitudes towards mortgages and home ownership, December 2016
                • What we think
                • Issues and Insights

                  • Fixed-rate loans will grow further in popularity in uncertain times
                    • The facts
                      • The implications
                        • High-quality online channels are essential to stave off disruptors
                          • The facts
                            • The implications
                              • Assistance for first-time buyers must continue post-Help to Buy
                                • The facts
                                  • The implications
                                  • The Market – What You Need to Know

                                    • Gross mortgage lending reached £245.4 billion in 2016
                                      • First-time buyer numbers increased to 339,000
                                        • The intermediary mortgage sector accounts for two thirds of the market
                                          • Rates remain appealing to home buyers
                                            • Brexit looms over the industry
                                              • Buy-to-let takes a hit
                                              • Market Size and Forecast

                                                • Mortgage lending grew by 11% in 2016…
                                                  • Figure 12: Gross mortgage lending, not seasonally adjusted, 2012-16
                                                • …but it was a turbulent ride
                                                  • Figure 13: Quarterly gross mortgage lending, not seasonally adjusted, 2014-16
                                                • Gross mortgage lending is forecast to reach £271 billion in 2021
                                                  • Figure 14: Forecast of gross mortgage lending, 2011-21
                                                  • Figure 15: Forecast of gross mortgage lending, at current and constant prices, 2011-21
                                                • Forecast methodology
                                                • Market Segmentation

                                                  • First-time buyer numbers grew again last year
                                                    • Figure 16: Volume of new mortgages, by purpose, not seasonally adjusted, 2012-16
                                                  • Remortgaging continues apace
                                                    • Figure 17: Value of new mortgages, by purpose, not seasonally adjusted, 2012-16
                                                • Channels to Market

                                                  • Two thirds of new mortgages were sold via intermediaries in 2015/16
                                                    • Figure 18: Distribution of regulated mortgage sales, direct versus intermediated, 2011/12-2015/16
                                                    • Figure 19: Distribution of regulated mortgage sales, advised versus non-advised, 2011/12-2015/16
                                                  • Banks retain role as first port of call for mortgage advice
                                                    • Figure 20: Sources of mortgage advice used for last mortgage/remortgage, December 2016
                                                • Market Drivers

                                                  • Price growth was steady in 2016
                                                    • Figure 21: Annual change in average UK house prices – ONS and Nationwide house price indices, Q1 2009-Q3 2016
                                                  • Rates remain appealing for borrowers
                                                    • Figure 22: Monthly interest rate of UK monetary financial institutions (excluding Central Bank) for 2-year fixed-rate mortgage at 75% LTV, 2-year variable-rate mortgage at 75% LTV and standard variable-rate (SVR) mortgage, January 2011-December 2016
                                                  • A “broken” housing market
                                                    • Planning for the right homes in the right places
                                                      • Building homes faster
                                                        • Diversifying the market
                                                          • Helping people now
                                                            • Figure 23: Number of permanent dwellings started and completed, 2009/10-2015/16
                                                          • Approvals fell in the immediate aftermath of the EU referendum…
                                                            • Figure 24: Monthly mortgage approvals, by purpose of loan, not seasonally adjusted, 2016
                                                          • …and Brexit has the potential for further impact
                                                          • Regulatory and Legislative Changes

                                                            • The Mortgage Credit Directive came into effect in 2016…
                                                              • …while more regulation could be on the way
                                                                • Regulatory changes dampen the appeal of buy-to-let
                                                                  • The end of the Help to Buy Mortgage Guarantee…
                                                                    • Figure 25: Monthly volumes and value of mortgages completed using the Help to Buy Mortgage Guarantee scheme, and value of Help to Buy Guarantees provided, October 2013-September 2016
                                                                  • …but first-time buyers get a boost from the Lifetime ISA
                                                                  • Companies and Brands – What You Need to Know

                                                                    • Lloyds Banking Group is the UK’s biggest mortgage provider
                                                                      • Digital innovations offer a new route to market for challengers
                                                                        • Britain’s leading banks carry accusations of being solely profit-driven
                                                                        • Market Share

                                                                          • Lloyds Banking Group leads a congested market
                                                                            • Figure 26: Selected mortgage providers, market share by gross new mortgage lending, 2014-16
                                                                        • Company Profiles

                                                                          • Lloyds Banking Group
                                                                            • Profile
                                                                              • Recent performance
                                                                                • Recent activity
                                                                                  • Nationwide Building Society
                                                                                    • Profile
                                                                                      • Recent performance
                                                                                        • Recent activity
                                                                                          • Santander
                                                                                            • Profile
                                                                                              • Recent performance
                                                                                                • Recent activity
                                                                                                  • Royal Bank of Scotland
                                                                                                    • Profile
                                                                                                      • Recent performance
                                                                                                        • Recent activity
                                                                                                          • Barclays
                                                                                                            • Profile
                                                                                                              • Recent performance
                                                                                                                • Recent activity
                                                                                                                  • HSBC
                                                                                                                    • Profile
                                                                                                                      • Recent performance
                                                                                                                        • Recent activity
                                                                                                                        • Innovations and Launches

                                                                                                                          • Digital innovations offer a new route to market for challengers
                                                                                                                            • High-LTV lending is back
                                                                                                                            • Advertising and Marketing Activity

                                                                                                                              • Adspend on mortgages remained fairly level in 2016
                                                                                                                                • Figure 27: Total above-the-line, online display and direct mail advertising expenditure on mortgages, 2012-16
                                                                                                                              • TV now makes up over half of mortgage adspend
                                                                                                                                • Figure 28: Total above-the-line, online display and direct mail advertising expenditure on mortgages, by media type, 2015-16
                                                                                                                              • HSBC is the biggest advertiser in the mortgage market
                                                                                                                                • Figure 29: Top 10 advertisers for above-the-line, online display and direct mail advertising expenditure on mortgages, 2012-16
                                                                                                                              • Nielsen Ad Intel coverage
                                                                                                                              • Brand Research

                                                                                                                                  • What you need to know
                                                                                                                                    • Brand map
                                                                                                                                      • Post Office and Nationwide are seen as trustworthy and different, followed by Santander and Halifax
                                                                                                                                        • Figure 30: Attitudes towards and usage of selected brands, December 2016
                                                                                                                                      • Key brand metrics
                                                                                                                                        • Consumers are most likely to recommend Nationwide
                                                                                                                                          • Figure 31: Key metrics for selected brands, December 2016
                                                                                                                                        • Brand attitudes: High street brands have a reputational advantage
                                                                                                                                          • Figure 32: Attitudes, by brand, December 2016
                                                                                                                                        • Brand personality: Halifax is considered fun and engaging
                                                                                                                                          • Figure 33: Brand personality – Macro image, December 2016
                                                                                                                                        • HSBC and Barclays are most likely to be labelled as profiteering
                                                                                                                                          • Figure 34: Brand personality – Micro image, December 2016
                                                                                                                                        • Brand analysis
                                                                                                                                          • Post Office enjoys the same positive perceptions as building societies
                                                                                                                                            • TSB and Halifax are reliable and accessible
                                                                                                                                              • HSBC and Barclays can be relied upon, but are profit-focused
                                                                                                                                                • Tesco Bank and The Co-operative Bank: Challengers struggling to stand out
                                                                                                                                                • The Consumer – What You Need to Know

                                                                                                                                                  • Consumers are split over how Brexit will affect home buying
                                                                                                                                                    • A third of adults have a mortgage
                                                                                                                                                      • Online is key for mortgage research, but people prefer to apply in person
                                                                                                                                                        • A tenth of non-homeowners plan to buy a property in the next two years
                                                                                                                                                          • A quarter of Millennials anticipate needing to move elsewhere to buy
                                                                                                                                                          • Effects of Brexit

                                                                                                                                                            • Consumers are split over how Brexit will affect home buying
                                                                                                                                                              • Figure 35: Consumer attitudes towards the effects of Brexit on home ownership, December 2016
                                                                                                                                                            • 48% think that Brexit will negatively impact the cost of living
                                                                                                                                                              • Figure 36: Consumer attitudes towards the effects of Brexit on the economy and personal finances, December 2016
                                                                                                                                                            • Mortgage holders are more optimistic about Brexit
                                                                                                                                                              • Figure 37: Consumer attitudes towards the effects of Brexit on the availability of mortgages, by mortgage ownership, December 2016
                                                                                                                                                          • Mortgage Ownership

                                                                                                                                                            • A third of adults have a mortgage
                                                                                                                                                              • Figure 38: Mortgage ownership, December 2016
                                                                                                                                                            • Single consumers find it much harder to get on the property ladder
                                                                                                                                                              • Figure 39: Mortgage ownership, by marital status, December 2016
                                                                                                                                                            • 28% of consumers rent their own home
                                                                                                                                                              • Figure 40: Rental activity, December 2016
                                                                                                                                                          • Type of Mortgage Owned

                                                                                                                                                            • Fixed-rate deals are the most popular mortgages
                                                                                                                                                              • Figure 41: Type of mortgage owned, December 2016
                                                                                                                                                            • Younger consumers are more likely to have a fixed-rate mortgage
                                                                                                                                                              • Figure 42: Type of mortgage owned, by age, December 2016
                                                                                                                                                          • Timing of Last Mortgage Purchase

                                                                                                                                                            • 28% of mortgages were arranged in the last year…
                                                                                                                                                              • Figure 43: Timing of last mortgage, December 2016
                                                                                                                                                            • …and three quarters of those took fixed-rate deals
                                                                                                                                                              • Figure 44: When mortgage was arranged, by type of mortgage held, December 2016
                                                                                                                                                          • Methods Used for Mortgage-related Activities

                                                                                                                                                            • Online is key for mortgage research, but people prefer to apply in person
                                                                                                                                                              • Figure 45: Methods used for/interested in using for researching and arranging a mortgage product, December 2016
                                                                                                                                                            • Branch services are still valued for making substantial amendments to mortgages
                                                                                                                                                              • Figure 46: Methods used for/interested in using for administering a mortgage product, December 2016
                                                                                                                                                            • Telephone services offer vital contact for inexperienced borrowers
                                                                                                                                                              • Figure 47: Use/interest in using telephone services for mortgage-related activities, by generation, December 2016
                                                                                                                                                          • Home Buying Plans

                                                                                                                                                            • A tenth of non-homeowners plan to buy a property in the next two years
                                                                                                                                                              • Figure 48: Intentions to buy a property in the next two years, December 2016
                                                                                                                                                            • Millennials are the most aspiring potential home buyers
                                                                                                                                                              • Figure 49: Intentions to buy a property in the next two years, by generation, December 2016
                                                                                                                                                            • High-LTV loans likely to be in high demand
                                                                                                                                                              • Figure 50: Intentions to buy a property in the next two years, by value of savings and investments, December 2016
                                                                                                                                                          • Renters’ Attitudes towards Mortgages and Home Ownership

                                                                                                                                                            • 22% of renters think lenders make it too hard to get a mortgage
                                                                                                                                                              • Figure 51: Renters’ attitudes towards mortgages and home ownership, December 2016
                                                                                                                                                            • One in six renters are currently saving for a deposit…
                                                                                                                                                              • …while 19% of under-35s are planning to use a Help to Buy or Lifetime ISA
                                                                                                                                                                • Older renters are most likely to be happy about their situation
                                                                                                                                                                  • Figure 52: Agreement with the statement “I would prefer to rent than own my own home”, by age, December 2016
                                                                                                                                                                • A quarter of Millennials anticipate needing to move elsewhere to buy
                                                                                                                                                                  • Figure 53: Agreement with the statement “I think I will need to move somewhere else to be able to afford to buy a property”, by generation, December 2016
                                                                                                                                                              • Appendix – Data Sources, Abbreviations and Supporting Information

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

                                                                                                                                                                        • Figure 54: Best- and worst-case forecast of gross mortgage lending, 2016-21
                                                                                                                                                                      • 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.

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