Abbey emerges as mortgage leader

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by Kay Murchie

Mortgage brokers believe Abbey is responsible for one in six new mortgages in the first quarter of 2008. This represents a doubling of its market share from 9% in 2006 to a current 17%.

Along with other banks, Abbey has suffered from the credit squeeze which has made it harder and more expensive for lenders to borrow money. However, unlike its competitors, Abbey is able to tap into funding from the European Central Bank (ECB) through its Spanish parent company Santander.

The ECB is widely recognised to have been quicker and more generous than the Bank of England in addressing banks’ current liquidity problems.

This has meant Abbey has been able to pick up some of the market share left by Northern Rock and other lenders who are not taking on any new business.

Abbey is the country’s second largest mortgage lender currently while HBOS is the first. Cheltenham & Gloucester (part of Lloyds TSB) and Nationwide are fighting for third and fourth place.

Last week, Abbey axed the last 100% mortgage. A spokesperson for Abbey said this is normal given the current market conditions. We are the last mainstream lender to withdraw our 100% product but it is in line with what everybody else has been doing.

There are now just 4,100 different mortgage deals on the market, compared with 15,599 last July.