As we have seen the UK’s mortgage market contracted slightly in 2011, driven primarily by the state-backed lenders. This comes despite considerable sums of new business being signed during the year by those banks.
According to the Council of Mortgage Lenders data, the UK’s biggest lender, Lloyds, lent £28bn in 2011, down only slightly from its 2010 total of £30bn. Yet its outstanding balances fell by £8.7bn. In simple terms, Lloyds isn’t pushing money out of the door at the same rate at which it is being paid in. You could call this the ‘churn rate’. Lloyds’ churn rate is slowing down, and it is not alone in this. Its fellow state-backed bank Royal Bank of Scotland shed a net £2.2bn, despite doing new business of £14.6bn during the year. Read more