ISBN 1-85765-642-3

Table of Contents

Executive Summary

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TABLE OF CONTENTS

Executive Summary

Market Definition

INTRODUCTION

MARKET SECTORS

MARKET POSITION

MARKET TRENDS

Table 1: UK Building Societies - Non-Converting, May 1996

Table 2: Number of UK Loans Approved by Type of Lender (000), 1991-1995

Table 3: House Price and Property Transaction Forecasts, 4th Quarter 1996

Table 4: Mortgage Loans for House Purchase by Type of Advance ( percent), 1995

Table 5: Repayment Method by Type of Advance for House Purchase ( percent), 1995

Table 6: Distribution of Loans for House Purchase by Amount Borrowed ( percent), 1995

Market Size

THE TOTAL MARKET

MARKET SECTORS

EUROPEAN PERSPECTIVE

Table 7: The UK Market for Mortgage Lending - Gross and Net Advances by Year and Quarter (£m), 1991-1996

Table 8: UK Mortgage Arrears and Repossessions by Half Year, 1991-1996

Table 9: UK Gross Advances by Source and Value (£m and percent), 1992-1995

Table 10: UK Quarterly Gross Advances by Source and Value (£m), 1994-1996

Table 11: Analysis of Gross Advances by Type and Application by Value ( percent of all loans), 1994-1996

Table 12: Gross Advances for House Purchase - All Buyers in the UK (£m), 1994-1996

Table 13: Gross Advances for House Purchase by UK Region (000, £m and £),1st Quarter 1996

Table 14: UK Loan Approvals by Source by Volume and Value (000 and £m), 1994-1996

Table 15: Housing Tenure in Great Britain (000), 1981-1994

Table 16: UK Starts and Completions in New Housebuilding (000), 1993-1996

Table 17: First-Time Buyers' Ability to Buy Index, 1991-1996

Industry Background

RECENT HISTORY

INDUSTRY CONCENTRATION

DISTRIBUTION

EMPLOYMENT

TRADE ASSOCIATIONS

Table 18: Number of UK Building Societies and Branches, 1991-1995

Table 19: Building Societies Changing Status, 1997

Table 20: Gross Advances of Converting Societies (£m and percent), 1995

Table 21: Branch Outlets of the Major British Banking Groups, 1991-1995

Table 22: Staff Numbers in Major UK Banks and Building Societies, 1991-1995

Competitor Analysis

THE MARKETPLACE

MARKET LEADERS AND THEIR BRANDS

MARKET SHARES OF LEADING MORTGAGE LENDERS

ADVERTISING AND PROMOTION

Table 23: Profile of Abbey National PLC (£m), 1992-1995

Table 24: Abbey National Total Operating Income - Segmental Analysis (£m and percent), 1994 and 1995

Table 25: Profile of National Westminster Bank PLC (£m), 1991-1995

Table 26: Profile of the Alliance & Leicester Group - Consolidated, 1991-1995

Table 27: Profile of Northern Rock Building Society (£m and percent), 1991-1995

Table 28: Market Shares of Leading UK Mortgage Lenders (£bn and percent), Year Ending 1995

Table 29: Main Media Advertising Expenditure by Mortgage Providers (£000), Year to September 1996

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Buying Behaviour

Table 30: Types and Source of Mortgages by UK Adults ( percent), 1993-1996

Table 31: Distribution of New Mortgages for House Purchase by Age of Borrower ( percent of loans granted), 1995

Table 32: Repayment Method in New Mortgages for House Purchase ( percent of loans granted), 1995

Table 33: Distribution of New Mortgages for House Purchase by Amount Borrowed ( percent of loans granted), 1995

Table 34: Average Prices by Type of Dwelling (£), 1995

Table 35: Ownership of Mortgages by Adults in Great Britain ( percent), December 1995

Table 36: The Base of Mortgage Ownership in Great Britain - Share of Mortgage Owners by Sector ( percent), 1996 and 1998

Table 37: Household Projections - England Only, 1991-2006

Table 38: Number of Households in England by Structure (000), 1981-2006

Outside Suppliers to the Industry

MORTGAGE FUNDS

WHOLESALE MONEY MARKETS

MONEY TRANSMISSION SERVICES

TECHNOLOGY

DIRECT SELLING

Current Issues

THE UK MORTGAGE MARKET

PRUDENTIAL ASSURANCE MORTGAGES

DRAFT MORTGAGE CODE

SCOTTISH WIDOWS

SEARCH COMPANIES

LETTING ENQUIRY FEES

HOUSE PRICE BONDS

MORTGAGE FRAUD

DRAFT BUILDING SOCIETY BILL

HOMELOANS DIRECT

NATWEST

'BUYING TO LET' INCREASING IN POPULARITY

MORTGAGE RATES

Forecasts

FUTURE PROSPECTS

THE MORTGAGE MARKET

ECONOMIC AND FINANCIAL OUTLOOK

FORECASTS

Table 39: UK Main Economic Indicators ( percent), 1996-2001

Table 40: Forecast UK Gross Mortgage Advances by Value at Current Prices (£, percent, million and £m), 1997-2000

Table 41: Forecast UK Gross Mortgage Advances by Value at Constant 1996 Prices (£m), 1997-2000

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HBI UK INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

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EXECUTIVE SUMMARY

The prospects for UK mortgage lending currently look brighter than for many years. Buoyant sales, from the second quarter of 1996 onwards, look set to make the year's final total for gross lending close to £71.19bn, an increase of 24.6 percent against the 1995 figure.

Key Note forecasts that, at current prices, gross advances will grow strongly throughout 1997 and 1998. Thereafter, growth will slow, but even so, gross advances for the year 2000 are predicted to exceed £98bn, nearly 38 percent higher than in 1996. In real terms, gross mortgage lending is forecast to grow by an average 8.4 percent per annum over the period, but most of this will be achieved in 1997 and 1998.

In 1995, 59 percent of gross mortgage advances came from building societies, with banks accounting for 37.2 percent. Other lenders accounted for the balance of 3.8 percent. By the end of 1997, however, over £200m of the industry's assets will have moved from the building societies sector, into that of the banks. This is caused by the conversion of some of the largest building societies into public limited companies. The effects of this dramatic change in the structure of the market is yet to be fully realised.

By the year 2006, there will be 21.9 million households in the UK, 1.7 million more than in 1996. However, the average household size is reducing, an increase of 40.5 percent being forecast in the number of households occupied by single persons. The market is not helped by a shortage of building land which, together with tight planning restrictions, is preventing builders from responding fully to increased demand.

The key first-time buyer group is set to fall to 7.1 million in the year 2009, 24.6 percent below 1995. Analysts, however, believe that this decline will slow when the pent-up demand of cautious first-time buyers, who have held back as a result of the recession, is released onto the market.

Flexibility of mortgages and direct marketing seem certain to accelerate. Increases in interest rates, anticipated after the forthcoming General Election, are focusing attention onto fixed rate products. `Buying-for-let' mortgages, fuelled by tax changes in the Budget and an injection of funds from institutional investors, are highlighted as a growth area. Mortgages backed by house price bonds, which treat housing as a financial asset are also set to grow. They are appearing on the market in packages which offer homeowners a reduced or zero rate of interest, in return for a share in any capital appreciation when the property is sold.

Text © 1997 Key Note

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