HSBC is UK’s largest direct mortgage lender
Analysis of the 2009 mortgage lending data recently released by the Council of Mortgage Lenders (CML) reveals that HSBC is the UK's largest lender of mortgages sold directly to homeowners.
Notwithstanding mortgage brokers writing sixty percent of UK mortgages in 2009 and ‘whole of market' brokers not being able to sell HSBC mortgages, the bank still managed to issue almost ten percent of all new mortgages, meaning the bank lent one in four of all directly sold mortgages.
This market share is a considerable increase on HSBC's average between 2000 and 2007 of only three percent of UK mortgage sales. The performance was driven by HSBC having the financial strength to lend, with existing loans equaling less than 85p for every £1 held in saving deposits (a market leading ratio) and a customer acceptance rate of eight out of ten applications, which is higher than the industry average.
Martijn van der Heijden, head of mortgages at HSBC commented: "Shopping around is essential when looking for a new mortgage and that means doing more than simply seeing a mortgage broker. Four in ten customers now choose to get their mortgage directly from their lender, and as research shows more and more lenders are now reserving their lowest rates for either existing customers or those happy to deal with them directly."
Direct lenders have driven the market
Recent research by Moneyfacts, commissioned by HSBC, showed that over the last two years mortgages offered directly to homeowners accounted for 93 percent of lowest rates in the market. Of the 96 mortgage deals which occupied the position of lowest rate in the market at any point over the last two years, just six of those mortgage deals were both available through brokers and had a lower interest rate than the equivalent best loan offered by direct lenders.
The research also showed that the average gap between the cheapest direct mortgage and cheapest broker offered mortgage was 0.31%. For at typical £150,000 mortgage it equates to £465 per year in saved interest for borrowers going direct.
In 2009, HSBC mortgages appeared in 1412 best buy tables, more than any other lender, First Direct (part of the HSBC Group) were second with 1347. The most competitive lender which sells through brokers managed just 700 appearances in best buy tables.
The CML figures showed that the top six high-street lenders, including Lloyds, Santander, Nationwide, RBS, Barclays and HSBC, had an overall market share of 92.2 per cent of all mortgages advanced last year.
HSBC has never sold its mortgages via intermediaries, the bank's strategy is that it believes it is best placed to sell its own mortgages, and that lender and borrower need to deal with each other during the sale process to make the best lending and borrowing decisions. The growth in directly sold mortgages is proof that more lenders are realising that holding the ongoing relationship with their customer is more important than just making another sale.