Abbey becomes top mortgage lender
Updated on 29 July 2008
Spanish-owned high street bank Abbey has overtaken Halifax as the biggest lender of new mortgages in the UK, figures revealed.
Abbey said its share of the new home loan market soared to around 26% in the first six months of the year, toppling Halifax from the pole position.
The firm, which is part of the Santander banking group, said it wrote one in three of every new mortgages in the second quarter as it picked up business while rivals cut back on lending amid the credit crunch.
Abbey's financial performance also bucked the wider gloom in the mortgage market, contributing £485 million in profits to its Spanish parent group, up 20% on the first half of last year.
The lender's net mortgage lending soared to £8.3 billion in the six months to June 30, after seeing market share rise to 16% in the first quarter and then more than doubling to 35% in the following three months.
And Abbey's position in the mortgage market is set to receive a further boost if Santander's agreed £1.26 billion takeover of Alliance & Leicester goes through as expected later this year.
The deal - announced earlier this month - will see Abbey merge with A&L to create a business with 959 UK branches and a share of more than 8% of the savings and personal loans market.
But Santander has already said it plans to trim its UK mortgage book after the A&L takeover as it seeks to limit exposure to the stricken housing market.
Abbey is also expecting its share of new mortgage business to ease back later this year, as the shake-out in the UK home loan sector stabilises. HBOS-owned Halifax has been the long-standing leader of Britain's mortgage sector, although it still remains the biggest overall lender in the UK by total mortgage book.
Abbey said it was able to pick up business despite the credit crunch funding problems as it relies on crisis-hit wholesale money markets for just 10% of its lending.
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