UK Mortgage Lending Industry 2014 and forecast to 2019 by Market Research Store
Deerfield Beach, FL -- (SBWIRE) -- 09/08/2015 -- Synopsis
The longer-term themes throughout the report's review period were that the number of accounts fell by 2.4%, while total outstanding balances remained relatively stable, up by 1.0%, and total gross lending grew by 8.5%. This was also reflected in the number of approvals declining by 0.15% between 2009 and 2014, while the value increased by 8.9%.
Interest rates are at their lowest levels since individual savings accounts (ISAs) began, which significantly reduces consumers' commitment to saving. As a result, consumers – those who can afford to save – are starting to opt either for stocks and shares accounts or deciding to pay off long-standing debts with higher interest rates. The average rate offered on cash ISAs fell from 2.55% at the start of 2012 to 1.74% in February 2013, and to just 1.64% at the start of 2014. The average rates for savings accounts fell from 5.09% in 2008 and 1.48% in 2014, which highlights the impact of the recession and the availability of cheap funds for the banks.
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Eight out of every 10 ISAs opened in FY2013–2014 were still cash ISAs however, as savers remained risk-averse, despite banks offering the worst interest rates on record. Stocks and shares ISAs are starting to recover however, following a substantial decline in the number for accounts from FY2010–2011 to FY2011–2012. The amount subscribed to stocks and shares ISAs has increased considerably since FY2009 – from GBP12.5 million to GBP18.4 million - which suggests that a smaller percentage of wealthier people, who can afford the increased risk, are filling these ISAs to the limit.
The BoE's central bank rate has remained at 0.5% since 2009, providing banks with an unparalleled level of cheap funds, meaning that the banks have significantly less need to compete for funds from consumers. The introduction of the government's Funding for Lending scheme – providing up to GBP80.0 billion to major banks to subsidize mortgage lending – has further reduced the banks' need for funds, which has had a considerable impact on the savings market. There have been an estimated 2,560 savings products cut since the introduction of the Funding for Lending scheme in August 2012, as of November 2014.
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Reasons To Buy
- Gain an understanding of the UK mortgage industry, with monthly and annual statistics on every aspect of the UK mortgage market, both in written form and in graphs and tables.
- Read analysis of relevant market statistics and descriptions of what has been happening in the mortgage market, why it has been happening, and what to expect over the coming years.
- Read about economic factors impacting the UK mortgage market.
- Learn how individual banks and building societies are affecting the market, in terms of market share and innovation.
Despite ideal conditions and steady growth in terms of approvals and outstanding balances through the early parts of 2015, the market is relatively subdued due to uncertainty surrounding the 2015 general election and the impact of the MMR.
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