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 & Close

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

What you get

What's included

Why buy from us?

Succeed

Our reports will provide you with market data, consumer research and competitive intelligence to succeed in your market.

Instant Access

Buy now and you'll have instant access to the information you need to make the right decisions.

Opportunities

Find out what's next in the markets that matter to you: where opportunities lie and what challenges you will face.

Trusted

A business Superbrand, Mintel is a source you can trust. We have been defining and refining the Market Intelligence mix since 1972.

Table of contents

  1. Overview

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

          • The market
            • Gross lending grew by 4% in 2017
              • Figure 1: Forecast of gross mortgage lending, 2012-22
            • Intermediaries distribute two thirds of new mortgages
              • Figure 2: Distribution of regulated mortgage sales, direct versus intermediated, 2012/13-2016/17
            • Price growth was subdued in 2017, but rates remain appealing
              • 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 2012-January 2018
            • First-time buyers given stamp duty relief
              • Companies and brands
                • Lloyds is the UK’s largest mortgage lender
                  • Figure 4: Top 10 UK mortgage providers, by outstanding mortgage balances at year-end, 2017
                • Adspend fell by a fifth in 2017
                  • Figure 5: Total above-the-line, online display and direct mail advertising expenditure on mortgages, excluding equity release, 2013-17
                • Banks dogged by negative traits, while Post Office and Nationwide flourish
                  • Figure 6: Attitudes towards and usage of selected brands, November 2017
                • The consumer
                  • A quarter of consumers have a mortgage
                    • Figure 7: Current housing situation, December 2017
                  • More than half of borrowers have a fixed-rate loan
                    • Figure 8: Type of mortgage held, December 2017
                  • A quarter of mortgages were arranged in the last year
                    • Figure 9: Timing of last mortgage, December 2017
                  • Consumers are optimistic about home buying plans
                    • Figure 10: Home buying plans for the next two years, by current housing situation, December 2017
                  • Interest rates dominate consumers’ choice of lender
                    • Figure 11: Factors affecting choice of mortgage lender, December 2017
                  • Shopping around is generally limited to renewal periods
                    • Figure 12: Mortgage shopping around activity, December 2017
                  • Offers from current lenders are welcome, less so from elsewhere
                    • Figure 13: Attitudes towards mortgage switching, December 2017
                  • What we think
                  • Issues and Insights

                    • Rising interest rates will bring opportunities and threats
                      • The facts
                        • The implications
                          • Switching is held back by cost and a lack of understanding
                            • The facts
                              • The implications
                                • At least a fifth of SVR customers would prefer an alternative product
                                  • The facts
                                    • The implications
                                    • The Market – What You Need to Know

                                      • Gross lending grew by 4% in 2017
                                        • Buy-to-let hit hard but remortgages and FTBs continue to grow
                                          • Intermediaries distribute two thirds of new mortgages
                                            • Price growth was subdued in 2017, but rates remain appealing
                                              • First-time buyers given stamp duty relief
                                              • Market Size and Forecast

                                                • Gross lending grew by 4% in 2017
                                                  • Figure 14: Gross mortgage lending, not seasonally adjusted, 2013-17
                                                • Lending forecast to enjoy steady growth in the next five years
                                                  • Figure 15: Forecast of gross mortgage lending, 2012-22
                                                  • Figure 16: Forecast of gross mortgage lending, at current and constant prices, 2012-22
                                                • Forecast methodology
                                                • Market Segmentation

                                                  • Buy-to-let activity hit hard by regulation changes
                                                    • Figure 17: Volume of new mortgages, by purpose, not seasonally adjusted, 2013-17
                                                  • Remortgaging and first-time buyers lead the growth in market value
                                                    • Figure 18: Value of new mortgages, by purpose, not seasonally adjusted, 2013-17
                                                • Channels to Market

                                                  • Intermediaries distribute two thirds of new mortgages
                                                    • Figure 19: Distribution of regulated mortgage sales, direct versus intermediated, 2012/13-2016/17
                                                    • Figure 20: Distribution of regulated mortgage sales, advised versus non-advised, 2012/13-2016/17
                                                  • Borrowers most likely to say their bank was the main source of advice
                                                    • Figure 21: Sources of mortgage advice used for last mortgage/remortgage, December 2017
                                                • Market Drivers

                                                  • Price growth was subdued in 2017
                                                    • Figure 22: Annual change in average UK house prices – ONS and Nationwide house price indices, January 2010-December 2017
                                                  • Rates are still borrower-friendly…
                                                    • Figure 23: 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 2012-January 2018
                                                  • …but high-LTV borrowers have seen fewer benefits
                                                    • Figure 24: 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 2018
                                                  • Building has increased but more homes still needed
                                                    • Figure 25: Number of permanent dwellings started and completed, 2006/07-2016/17
                                                • Regulatory and Legislative Changes

                                                  • First-time buyers given stamp duty relief
                                                    • FCA’s mortgage market study delayed
                                                      • Lifetime ISA launches to a cool welcome
                                                      • Companies and Brands – What You Need to Know

                                                        • Lloyds is the UK’s largest mortgage lender
                                                          • Lenders continue to compete on rates and improve processes
                                                            • Adspend fell by a fifth in 2017
                                                              • Banks dogged by negative traits, while Post Office and Nationwide flourish
                                                              • Market Share

                                                                • Lloyds is the UK’s largest mortgage lender
                                                                  • Figure 26: Top 10 UK mortgage providers, by outstanding mortgage balances at year-end, 2015-17
                                                                • Big six dominate the market
                                                                  • TSB continues to impress
                                                                  • Competitive Strategies

                                                                    • Lenders continue to compete on rates
                                                                      • Supermarket brands (re)enter the market
                                                                        • Brands seek to improve the application process
                                                                        • Advertising and Marketing Activity

                                                                          • Above-the-line adspend fell again in 2017
                                                                            • Figure 27: Total above-the-line, online display and direct mail advertising expenditure on mortgages, excluding equity release, 2013-17
                                                                          • TV is the increasingly dominant channel for advertising mortgages
                                                                            • Figure 28: Total above-the-line, online display and direct mail advertising expenditure on mortgages, excluding equity release, by media type, 2015-17
                                                                          • Halifax is the biggest advertiser of mortgages in the UK
                                                                            • Figure 29: Top 10 advertisers of above-the-line, online display and direct mail advertising expenditure on mortgages, excluding equity release, 2015-17
                                                                          • Sponsorships help keep brand awareness high
                                                                            • Nielsen Ad Intel coverage
                                                                            • Brand Research

                                                                                • Brand map
                                                                                  • Wider business sees Post Office score high for trust and differentiation
                                                                                    • Figure 30: Attitudes towards and usage of selected brands, November 2017
                                                                                  • Key brand metrics
                                                                                    • Nationwide is the most likely to provide an excellent experience
                                                                                      • Figure 31: Key metrics for selected brands, November 2017
                                                                                    • Brand attitudes: Supermarket brands’ customer service is perceived to be poor
                                                                                      • Figure 32: Attitudes, by brand, November 2017
                                                                                    • Brand personality: Post Office, Nationwide and Santander are the most fun
                                                                                      • Figure 33: Brand personality – Macro image, November 2017
                                                                                    • Sainsbury’s Bank and Post Office are seen as the most affordable
                                                                                      • Figure 34: Brand personality – Micro image, November 2017
                                                                                    • Brand analysis
                                                                                      • Major banks still carry behavioural baggage…
                                                                                        • …while challengers long for opportunities to prove trustworthiness
                                                                                          • Post Office tops the chart in most positive attributes
                                                                                            • Nationwide’s success is built on being different
                                                                                            • The Consumer – What You Need to Know

                                                                                              • A quarter of consumers have a mortgage
                                                                                                • More than half of borrowers have a fixed-rate loan
                                                                                                  • A quarter of mortgages were arranged in the last year
                                                                                                    • Consumers are optimistic about home buying plans…
                                                                                                      • …and driven in the pursuit of low rates
                                                                                                        • Shopping around is generally limited to renewal periods
                                                                                                          • Offers from current lenders are welcome, less so from elsewhere
                                                                                                          • Mortgage Ownership

                                                                                                              • A quarter of consumers have a mortgage
                                                                                                                • Figure 35: Current housing situation, December 2017
                                                                                                              • 35-54s are most likely to be paying a mortgage
                                                                                                                • Figure 36: Current housing situation, by age, December 2017
                                                                                                              • Lower earners exposed to later-life rental payments
                                                                                                                • Figure 37: Current housing situation, by gross annual household income, December 2017
                                                                                                            • Type of Mortgage Held

                                                                                                              • More than half of borrowers have a fixed-rate loan
                                                                                                                • Figure 38: Type of mortgage held, December 2017
                                                                                                              • SVRs remain the second most common type of mortgage
                                                                                                                • Figure 39: Type of mortgage held, by age, December 2017
                                                                                                            • Timing of Last Mortgage Purchase

                                                                                                              • A quarter of outstanding mortgages were arranged in the last year
                                                                                                                • Figure 40: Timing of last mortgage, December 2017
                                                                                                              • Half of over-45s have had the same mortgage for more than five years
                                                                                                                • Figure 41: Timing of last mortgage, by age, December 2017
                                                                                                              • Four fifths of mortgages arranged in the last year have fixed rates
                                                                                                                • Figure 42: Type of mortgage held, by timing of last mortgage, December 2017
                                                                                                            • Home Buying Plans

                                                                                                              • Consumers are optimistic about home buying plans
                                                                                                                • Figure 43: Home buying plans for the next two years, by current housing situation, December 2017
                                                                                                              • Private renters are by far the most likely to become first-time buyers
                                                                                                                • Figure 44: Home buying plans for the next two years, by current housing situation, not including full-time students or retirees, December 2017
                                                                                                            • Factors Affecting Choice of Mortgage Lender

                                                                                                              • Interest rates are the key factor in mortgage choice
                                                                                                                  • Figure 45: Factors affecting choice of mortgage lender, by home buying plans, December 2017
                                                                                                                • Consumers appear to give little thought to worst-case scenarios
                                                                                                                  • Reputation counts, but it’s not all about the brand
                                                                                                                  • Mortgage Comparison and Switching

                                                                                                                    • Most shop around when their loan term ends
                                                                                                                      • Figure 46: Mortgage shopping around activity, December 2017
                                                                                                                    • Proactive engagement is less common…
                                                                                                                      • Figure 47: Agreement with selected statements about shopping around for mortgages, by type of mortgage held, December 2017
                                                                                                                    • …largely due to costly exit fees
                                                                                                                      • Figure 48: Agreement with selected statements about shopping around for mortgages, by timing of last mortgage purchase, December 2017
                                                                                                                  • Attitudes towards Mortgage Switching

                                                                                                                    • Borrowers are happy to hear from existing providers...
                                                                                                                      • Figure 49: Attitudes towards mortgage switching, December 2017
                                                                                                                    • …but competitors are less welcome
                                                                                                                      • Shopping around is hard work and difficult to understand
                                                                                                                        • A significant proportion of SVR mortgage holders need help
                                                                                                                          • Figure 50: Attitudes towards mortgage switching, by type of mortgage held, December 2017
                                                                                                                      • Appendix – Data Sources, Abbreviations and Supporting Information

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

                                                                                                                                • Figure 51: Best- and worst-case forecast of gross mortgage lending, 2017-22
                                                                                                                              • Forecast methodology