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UK Mortgages market report

Everything you need to make the right decisions

Providing the most comprehensive and up-to-date information and analysis of the Mortgages market, and the behaviours, preferences and habits of the consumer.

Mintel has the answers you’re looking for

What are the key challenges facing the industry and how fast are its rates of growth? Who is the consumer and what do they want? Where are the opportunities, where are the risks and what lies ahead?

Products 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.

Expert analysis from a specialist in the field

Written by Richard Shepherd, a leading analyst in the Finance sector, his extensive knowledge delivers in-depth commentary and analysis to highlight current trends and add expert context to the numbers.

The mortgage market remains in a good state, but it is probable that the slower rate of growth achieved in 2017 is likely to be a sign of things to come over the next few years. While mortgages are still in high demand, the challenges of Brexit uncertainty, squeezed household incomes and concerns over interest rate rises will limit performance. Richard Shepherd
Senior Financial Services Analyst

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Table of contents

  1. Overview

    • What you need to know
      • Covered in this Report
      • Executive Summary

          • The market
            • Market reveals resilience in 2017
              • Figure 1: Value of New loans in the UK Commercial Mortgage market, £ billion, 2013-2017
            • Growth underpinned by office and industrial sectors, while retail continues to struggle
              • Figure 2: Owner occupied and invested commercial property value, % of total, 2013-2017
            • Commercial property borrowing expected to maintain resilience
              • Non-bank lenders continue to grow in prominence
                • Figure 3: New loans value allocation by lender category, 2016 and 2017
              • Companies and brands
                • Extensive restructuring of businesses
                  • What we think
                  • Issues and Insights

                    • Brexit uncertainties
                      • The facts
                        • The implications
                          • Decline of retail
                            • The facts
                              • The implications
                              • The Market – What You Need to Know

                                • Market recovers in 2017
                                  • Growing divide between struggling retail and growing industrial and office sectors
                                    • Non-bank lenders continue to consolidate
                                      • Commercial property investment recover strongly in 2017
                                        • Commercial property borrowing outlook remains cautiously optimistic
                                        • Market Size

                                          • Methodology
                                            • New lending remained stable in 2017
                                              • Figure 5: Value of New loans in the UK Commercial Mortgages market, £ billion, 2013-2017
                                            • Total outstanding debt falls slightly
                                              • Figure 6: Value of outstanding loan books, £ billion, 2013-2017
                                          • Category Market Share

                                            • Non-banks continue to grow increasingly prominent in new lending
                                              • Figure 7: Value of New loans in UK Commercial Mortgages market, allocation by lender category, 2016 and 2017
                                            • Outstanding debt remains stable
                                              • Figure 8: Debt allocation, by lender category, 2016 and 2017
                                            • London dominates but the regions are expected to grow
                                              • Figure 9: Geographic distribution of loan books, % of total, 2017
                                            • Offices remain the largest sector
                                              • Figure 10: Property type distribution of loan books, % of total, 2017
                                          • Market Segmentation

                                            • Growing divide between struggling retail and growing industrial and office sectors
                                              • Figure 11: Owner occupied and invested commercial property value, % of total, 2017
                                              • Figure 12: Owner occupied and invested commercial property value, % of total, 2013-2017
                                            • Falling need for retail property
                                              • London continues to dominate offices sector despite increased uptake in the regions
                                                • Figure 13: Value of office property, by region, 2017
                                              • Industrial demand strongest performer of 2017
                                                • Growth in leisure and student housing drive growth in other commercial
                                                • Market Forecast

                                                  • Commercial borrowing expected to maintain steady minor growth
                                                    • Figure 14: Market forecast for commercial property capital value, 2013-2022
                                                  • Offices and industrial expected to maintain popularity, while retail will continue to struggle
                                                      • Figure 15: Forecasted segmentation of the UK Commercial Property market, 2018-2022
                                                    • Interest rate growth
                                                      • Boosted interest in the regions
                                                      • The Impact of the Economy

                                                        • Interest rates
                                                          • Availability of credit
                                                          • Market Trends

                                                            • Commercial property investment recovered in 2017
                                                                • Figure 16: Investment in UK commercial property, £ billion, 2013-2017
                                                              • Commercial lending rates rose in 2017 following 2016 dip
                                                                  • Figure 17: Average interest rate for UK MFI new advances to PNFCs, %, MAY 2016-April 2018
                                                                • Availability of credit remained largely stable in 2017
                                                                    • Figure 18: Availability of corporate credit to PNFCs in the last three months, net % balance, Q1 2012-Q1 2018
                                                                • Market Drivers

                                                                  • Foreign Investment
                                                                    • Shift among residential landlords to commercial investment
                                                                      • Growing uptake among local authorities
                                                                      • Companies and Brands – What You Need to Know

                                                                        • Extensive restructuring of businesses
                                                                          • Infrastructure decline in the past year
                                                                            • Operators move online
                                                                            • Industry Structure

                                                                              • Changes in the structure of the industry
                                                                                  • Figure 19: Analysis of the changes in the structure of the banks and building societies sector, number of outlets and businesses, 2013-2017
                                                                                  • Figure 20: Analysis of the changes in the structure of the financial leasing sector, number of outlets and businesses, 2013-2017
                                                                                  • Figure 21: Analysis of the changes in the structure of the other credit granting sector, number of outlets and businesses, 2013-2017
                                                                                • Structure by turnover
                                                                                  • Figure 22: Analysis of the financial structure of the banks and building societies sector, 2016 and 2017
                                                                                  • Figure 23: Analysis of the financial structure of financial leasing sector, 2016 and 2017
                                                                                  • Figure 24: Analysis of the financial structure of other credit granting sector, 2016 and 2017
                                                                                • Structure by employment
                                                                                  • Figure 25: Analysis of the employment structure of the banks and building societies sector, 2016 and 2017
                                                                                  • Figure 26: Analysis of the employment structure of the financial leasing sector, 2016 and 2017
                                                                                  • Figure 27: Analysis of the employment structure of the other credit granting sector, 2016 and 2017
                                                                              • Company Profiles

                                                                                • Barclays PLC
                                                                                    • Figure 28: Financial analysis of Barclays PLC, 2013-2017
                                                                                  • HSBC
                                                                                      • Figure 29: Financial analysis of HSBC, £ million, 2013-2017
                                                                                    • Lloyds Banking Group
                                                                                        • Figure 30: Financial analysis of Lloyds Banking Group, £ million, 2013-2017
                                                                                      • Royal Bank of Scotland Group
                                                                                          • Figure 31: Financial analysis of Royal Bank of Scotland Group, £ million, 2013-2017
                                                                                        • Santander UK Plc
                                                                                            • Figure 32: Financial analysis of Santander UK Plc, £ million, 2013-2017
                                                                                        • Appendix – Data Sources, Abbreviations and Supporting Information

                                                                                            • Abbreviations
                                                                                              • Methodology
                                                                                              • Further Sources and Contacts

                                                                                                • Trade associations
                                                                                                  • Trade magazines
                                                                                                    • Trade events