Larger banks 'best placed' to offer competitive mortgage deals

Monday, February 8th 2010

Bigger banks are more likely to afford to offer lower mortgage rates to UK consumers, as they may have been better able to weather the economic downturn, according to the editor of What Mortgage.

Santander and HSBC were among the institutions that enjoyed growth in the past year, commented Ben Wilkie.

He noted that while "no-one is immune from the downturn", larger banks may have experienced greater stability - allowing them to offer better deals than smaller organisations.

But Mr Wilkie pointed out that lenders such as Santander may struggle to increase their market share further in 2010 thanks to increased competition as the year progresses.

"There is still choice out there and the fact that perhaps there will be three or four new banks launching this year is going to help", he said.

New figures from the Spanish bank estimate that it currently holds a net market share of 69.1 per cent as it increased its net mortgage lending in Britain to £7.6 billion in 2009.

During its fourth quarter of last year, Santander's share of the UK's total residential mortgage market was 13.5 per cent.