英国の住宅ローン市場

Abstract

Overview

Introduction

2007 started brightly with gross lending in the UK mortgage market recording a new peak in the first half. However, the later half of last year was marred by liquidity issues, which have been carried over into 2008. This current year is proving to be a very difficult one for the mortgage sector. What does the future hold for this sector?

Scope

• This report consists of 7 UK mortgage briefings published individually between November 2007 and July 2008.
• Focuses on hot topics in the UK mortgage market such as funding issues and competitor strategies.
• Provides forecasts under three scenarios.
• Accompanying Excel data pack and PowerPoint Executive Summary.

Report Highlights

Due to the continuous lack of liquidity, lenders continue to rationalize lending, focusing on good quality business. With lesser appetite for riskier lending, lenders have significantly raised the level of deposit required from mortgage customers.

There are but a handful of lenders that offer a green mortgage product. Out of a total of 120 active lenders, only five offer a true green mortgage: a staggeringly small 4% of the market.

With fewer products available on the market and consumer demand remaining strong, the dynamics are changing. Lenders are currently in a position where they can charge higher prices without this affecting demand. In fact, many lenders are seeing an excess of demand for their products despite increasing interest rates on their products.

Reasons to Purchase

• Plan your future strategy with confidence using Datamonitor' s scenario-based forecasts of UK residential mortgage gross advances to 2012.
• Understand the challenges the mortgage industry is facing.
• In-depth analysis of how lenders are coping with a number of issues allowing you to reassess your strategy.

Table of Contents

• Overview
  • Catalyst
  • Summary
• Table of Contents
• Table of figures
• Table of tables
• The UK Mortgage Market in 2007 and Future Outlook
  • 2007 was a story of two halves
    • Gross mortgage lending in H1 2007 reached new peaks
    • H2 2007 was marred by liquidity issues
      • The credit crunch took time to feed through the performance of the UK mortgage market
      • Buy-to-let was the major driver behind the performance of H2 2007
  • 2008 is proving to be one of the most challenging years for the UK mortgage market
    • The credit crunch is showing no signs of abating
      • Availability of credit remains tight and mortgage interest rates high
    • Economic growth is forecasted to fall below the 2% mark in 2008 and 2009
    • After years of high price inflation, house prices have started to fall
    • Consumer debt remains an issue
      • Mortgage arrears and repossessions are increasing
    • House purchase approvals have dropped dramatically
      • Gross lending over the first four months of 2008 is already down by 9.8% over the previous period
  • Gross lending in the UK mortgage market will remain subdued over the next few years
    • Under Datamonitor' s view, gross lending will drop by 19.3%in 2008 to reach £293.5 billion
    • Two additional alternative scenarios are presented below as the UK mortgage market remains one of uncertainty
      • The pessimistic scenario assumes a house price crash
      • The optimistic scenario assumes market confidence returns in H2 2008
• Competitive Dynamics in the UK Mortgage Market
  • Most top 10 mortgage lenders grew their business over a record 2007 mortgage market
    • Nationwide recorded the biggest growth in gross lending among the top 10 mortgage lenders
      • HBOS' s focus shift to profitability rather than volume has seen the lender lose share over the years
    • All top 10 mortgage lenders increased their mortgage balances over 2007
    • Competitive pricing and good retention strategies are behind lenders' 2007 success
  • The credit crunch is changing the competitive landscape of the UK mortgage market
    • The number of mortgage lenders operating in the UK market has declined over the space of a year
      • Small building societies continue to dominate in terms of number
    • The liquidity squeeze is leading to higher margins
      • While the major lenders have increased the rates on their two-year fixed rates, SVRs have gone down
    • Lenders who are willing to compete on prices will increase their market share
      • HSBC extended its Rate Matcher service to non-HSBC customers
      • Abbey capitalized on strong funding position and increased its gross lending market share in Q1 2008
      • Nationwide has re-priced its short-term fixed rate mortgages to make them more attractive
    • There will be a number of changes in movements of mortgage lenders' market share in 2008
      • Northern Rock' s nationalization means that it can not compete on a level footing with other lenders
  • Lenders' focus will continue to remain on profitability and retention
    • Gone are the days of mass customer acquisition
    • Retention is the word
• Funding Issues in the UK Mortgage Market
  • The Northern Rock crisis has brought the issue of mortgage funding to the fore
    • Mortgage funding via the wholesale markets has become more popular in the UK in recent years
      • Securitization in particular has become much more common because of its benefits to lenders
      • The UK mortgage market has become highly sophisticated because of non-retail funding and securitization
    • Starting the troubles, defaults in the US sub-prime mortgage market led to a disruption of credit markets
    • This, in turn, led to a crisis in liquidity, which Northern Rock suffered from
    • Northern Rock' s funding model, as well as other lenders' ,have now come into question
  • Some UK lenders, mainly specialists, are now particularly exposed to liquidity shortages
    • Lenders in the specialist sectors are going to be impacted to a greater degree than diversified banks
      • Difficulties are being played out, particularly in the sub-prime mortgage market
    • All lenders will nonetheless face higher wholesale funding costs and a slower mortgage market
      • Should the wholesale markets continue to be difficult in the long term, many more lenders will suffer
      • Diversified banks may not be exposed on the funding side,but many are on the investment side
  • However, this type of funding will continue being relied upon as it is a strong model
    • Funding by wholesale markets and securitization has worked successfully for many years
      • Loose US lending standards and securitization' s opaque nature is more responsible for the current crisis
    • There is no going back to retail-only funding as a large portion of the mortgage market would disappear
    • The market will be repaired, but safeguards should be put into place so that this situation does not re-occur
• Future Buyer Intentions in the UK Mortgage Market
  • 11% of consumers might take out, top up or change their mortgage in the next five years
    • General insurance products were the most mentioned products but mortgages received significant mentions too
      • Consumers falling in higher household income bands are more likely to consider taking out, topping up or changing their mortgage
  • Consumers would most likely consider traditional providers when taking out a mortgage
    • Building societies and banks are by far the preferred types of mortgage providers by consumers when considering taking out a mortgage
      • Consumers are more likely to consider major mortgage lenders when taking out a mortgage
  • Consumers would mostly use face-to-face and the internet to find information about a mortgage
    • 67% of participants mentioned they would speak to someone face-to face
    • The internet is also a popular method for seeking out information
      • When taking out a mortgage, more than a third of consumers would choose the internet over face-to-face to find information about the product
  • Consumers would most likely approach IFAs when seeking out information on a mortgage
    • 53% of participants mentioned IFAs
      • More than a quarter of consumers would seek advice from their friends, family and colleagues
  • Unsurprisingly, most consumers would use face-to-face when arranging a mortgage
    • 76% of consumers will use face-to-face to arrange a mortgage
    • The majority of consumers would never consider digital TV when arranging a mortgage
• Assessing the Risk of High LTV Mortgages in the UK Market
  • High LTV mortgages have become popular as house prices have grown
    • Datamonitor defines high LTV mortgages as mortgage products with a 90% LTV or above
      • Some specialist mortgages above 85% LTV, however, can also be considered high LTV mortgages
    • First-time buyers and others have been priced out as house prices have risen
    • To cater for customers and remain competitive, lenders began to offer higher LTV mortgages
    • In turn, buyers have been taking up high LTV mortgages
  • There is concern surrounding high LTV mortgages because of the risks they pose
    • High LTV mortgages expose borrowers to a greater extent than traditional mortgages
    • Higher exposure is particularly troubling as the economic climate is becoming more difficult
      • House price growth is now slowing, though 2007 looks still to be a strong year for most regions in the UK
      • Interest rates have risen since the second half of 2006 and caused mortgage rates to rise
      • Arrears and repossessions continue to rise but remain low
      • Unsecured bad debt continues to rise
      • Most importantly, the economic climate looks more uncertain given recent events in the financial world
    • It is not in lenders' interests for borrowers to be unable to afford their mortgages
  • The risk for most lenders nevertheless remains low
    • High LTV mortgages remain a very small proportion of the overall mainstream market
      • Major lenders are not particularly exposed to high LTV lending
      • Recent mortgage lending, however, poses more risk
      • Even for mortgages with LTVs of around 80-90% there is still some risk
    • For some specialist sectors, however, high LTV mortgages could be more of a problem
      • Self-certification mortgages are now available at higher LTVs but some customers overstate their incomes
      • While buy-to-let LTVs remain largely under 85%, rental income is not the only factor to affect affordability
      • Lenders operating in the sub-prime prime sector are at greatest risk
    • But lenders are recognizing the risks since the credit crunch and making lending criteria more stringent
      • Mainstream lenders have lowered LTVs and raised prices
      • Lending criteria and products have been cut back particularly in the sub-prime mortgage market
  • Still, lenders should be prepared should a number of scenarios occur
    • A number of scenarios could affect both mortgagors and lenders with high LTV mortgages
      • A significant rise in interest rates would see an increased number of borrowers in payment difficulties
      • A house price crash would throw a significant number of borrowers into negative equity
      • Should an economic downturn occur, borrowers' savings would not cover payments for long
    • Lenders should take the right precautions to avoid danger in the future
• Green Mortgages: Assessing the Feasibility of Success in the UK
  • Increased awareness of environment change has boosted demand for green products
    • Governments across the world are under pressure to reduce their countries' impact on the global environment
      • The UK has proposed one of the most ambitious targets to combat climate change
    • Energy efficient housing is one of the key measures that the UK government is hoping will achieve a reduction in emissions
      • Mandatory energy performance certificates are now required for every residential property in the UK, as part of the requirements of a Home Information Pack
    • The UK banking market offers a range of green-friendly products
      • Consumers adopted more ethical banking products from 2006 to 2007, growing the business by 11%
      • Ethical investments are still the largest and most popular green financial instrument
    • While there is a standard definition of a green mortgage,the product takes many different forms
      • Mortgage lenders offer various types of green mortgage
  • The market for green mortgages is still small, despite as light increase in popularity
    • Most green mortgage providers are small lenders
      • Typically, a lender' s green mortgage product will be more expensive than their best mortgage offer, although in some cases discounts are offered
    • While category 1 lenders have enjoyed some growth,category 2 lenders' green mortgage books remain steady
    • Green mortgages remain niche internationally
      • Financial services companies abroad are more creative in their approach to offering green mortgage incentives.
  • Green mortgages are likely to remain a niche product
    • The UK mortgage market is driven by price
      • History demonstrates that higher-priced, non-standard mortgage offers do not perform well in the UK market
      • The green proposition is likely to provide a competitive advantage to lenders if a customer has to choose between two similarly priced products
    • There is limited demand for green mortgages
      • The green mortgage product appeals only to a limited segment of the market
      • Green mortgages do not appeal to first-time buyers
      • In the current market, second and third home buyers are opting for the lowest priced mortgage products
    • Very few lenders offer the product, thus limiting supply and product choices
      • Market uncertainty is shrinking non-standard product portfolios
    • Few mortgage brokers are aware of green mortgages
  • Widespread uptake will require government and institutional commitment
    • Some incentives have been put in place but the market view is that they are not enough
      • Proposed government initiatives to encourage greener living will drive demand for green mortgages
    • Sustained co-operation between lenders and the government is needed to grow the green mortgage market
      • Some European countries have successfully implemented incentive schemes to boost green housing
    • The UK needs to stimulate greater awareness of green building among the general public
      • Consumer education is key
• Impact of the Credit Crunch on UK Mortgage Product Structures
  • The UK mortgage market has shrunk following the liquidity crisis
    • The lack of funds in the UK money markets has led to drastic changes in the mortgage market
    • Lenders have resorted to using a number of strategies to balance demand with supply
    • A large number of mortgage deals have disappeared off the market
    • Some lenders have suspended new originations
  • Mortgage product structures have changed considerably
    • Sub-prime mortgage products are very limited
    • LTV ratios have decreased significantly across all mortgage products
      • While 100% LTV mortgages still exist in the market, they are only available in restricted regions or with heavy credit guarantees
      • The average maximum LTV has decreased by 8.9% in 12 months
    • Fixed-rate mortgages are currently the most expensive they have been in the last decade
      • Even mainstream lenders' best fixed-rate offers are not particularly attractive
    • Lenders will continue to differentiate prices between distribution channels
    • Maximum advances are lower by over £200,000 compared to June 2007
  • The impact of the credit crunch will accelerate through 2008
    • The sub-prime and near-prime markets will continue to be worst hit
    • First time buyers will continue to struggle to find credit
    • Mortgage product innovation that demonstrates a tangible benefit to home buyers will win new market share
      • HSBC' s Rate Matcher Mortgage offers a competitive remortgage rate to struggling home owners
      • Lloyds TSB' s Airmiles mortgage helps consumers forget their credit problems
• APPENDIX
  • Supplementary data
    • The UK Mortgage Market in 2007 and Future Outlook
    • Competitive Dynamics in the UK Mortgage Market
    • Funding Issues in the UK Mortgage Market
    • Future Buyer Intentions in the UK Mortgage Market
    • Assessing the Risk of High LTV Mortgages in the UK Market
    • Impact of the Credit Crunch on UK Mortgage Product Structures
  • Definitions
    • Bank of England base rate
    • Buy-to-let
    • CAGR
    • Fixed rate mortgage
    • Gross advances
    • Mortgage intermediary
    • Non-standard and sub-prime
    • Remortgaging
    • Tracker mortgage
    • Variable mortgage
  • Methodology
  • Forecasting methodology
  • Further reading
  • Ask the analyst
  • Datamonitor consulting
  • Disclaimer
• List of Tables
  • Table 1: Gross lending by product line for H1 2007 and H2 2007
  • Table 2: A sample of independent house price forecasts for the UK residential property market
  • Table 3: Forecasted gross advances in the UK residential market by product lines under Datamonitor' s view, 2007-12f
  • Table 5: Forecasted gross advances in the UK residential market by product lines under an optimistic view, 2007-12f
  • Table 6: Two-year fixed rate products by top 10 mortgage lenders
  • Table 7: Likely movement in gross lending market share of top 10 mortgage lenders in 2008
  • Table 8: LTV at origination of all loans for house purchase in the UK, Q2 2005-Q4 2006 (%)
  • Table 9: Change and percentage change in the number of products available in the UK mortgage market, July-September 2007
  • Table 10: Amount held in ethical finance, 2006-07
  • Table 11: Selected green mortgage offers in the UK market
  • Table 12: International green mortgage offerings
  • Table 13: Largest reductions in mortgage product offering by lender, June 2007-08
  • Table 14: Lenders closed to new business, by number of mortgage deals offered in June 2007
  • Table 15: Comparison of top 10 lenders' maximum LTV ratios, June 2007-08
  • Table 16: Top five cheapest and top five most expensive SVR mortgage offers, June 2008
  • Table 17: Comparison of top 10 lenders' fixed and standard variable rate mortgage offers, June 2008
  • Table 18: UK monthly gross mortgage advances, 2006-07,January-June, (£m)
  • Table 19: UK monthly gross mortgage advances, 2006-07,July-December, (£m)
  • Table 20: Gross mortgage lending by product line,2003-07
  • Table 21: Nationwide' s and Halifax' s house price indices, May 2007-May 2008
  • Table 22: Household debt to income ratio, 1998-2007
  • Table 23: Arrears and repossession data, 2003-07
  • Table 24: Value of all secured loans approved in the UK by product line, April 2006-April 2008 (£m)
  • Table 25: Top 10 mortgage lender by gross advances,2006-07
  • Table 26: Top 10 UK mortgage lenders by gross advances,2001-07
  • Table 27: Top 12 UK mortgage lenders by balances outstanding, 2001-07
  • Table 28: List of mortgage lenders in the UK market, May 2008 (Table 1 of 2)
  • Table 29: List of mortgage lenders in the UK market, May 2008 (Table 2 of 2)
  • Table 30: Major UK banks' wholesale funding as a proportion of total funding (%)
  • Table 31: UK major banks' issuance of RMBS (£bn)
  • Table 32: Northern Rock balance sheet growth and liability structure (£bn)
  • Table 33: Major UK banks' customer funding gap (£bn)
  • Table 34: Which of these types of organizations, if any,would you consider/never consider when taking out a mortgage with?
  • Table 35: Responses for Northern Rock to the question' which four or five of these companies would you consider taking a mortgage with?
  • Table 36: When taking out a mortgage, which of these methods, if any, would you use to find information about this product?
  • Table 37: UK properties in arrears and taken into possession, H1 1995-H1 2007 (units)
  • Table 38: The number of prime residential mortgage offers, June 2007-June 2008
  • Table 39: Number of sub-prime mortgages and sub-prime lenders, June 2007-08
  • Table 40: The number of 95% LTV mortgages and the number of 100% and 100%+ LTV mortgages, June 2007-June 2008
  • Table 41: Average maximum borrowing, June 2007-June 2008
  • Table 42: Number of first time buyer and remortgage offers, June 2007-June 2008
• List of Figures
  • Figure 1: UK gross mortgage lending in the first six months of 2007 out performed 2006 levels
  • Figure 2: Gross lending in November and December 2007 failed to reach 2006 levels
  • Figure 3: Gross lending for ' other' was the fastest growing product line over the last five years
  • Figure 4: House prices have been falling in recent months
  • Figure 5: Household debt to income ratio has increased steadily over the last 10 years
  • Figure 6: The number of properties taken into possession increased further in 2007
  • Figure 7: Loan approvals for house purchase have dropped considerably
  • Figure 8: Under Datamonitor' s view, gross lending will drop by 19.3% in 2008 to reach £293.5 billion
  • Figure 9: Under a pessimistic view, the UK mortgage market will contract significantly over 2008-10f
  • Figure 10: Under an optimistic view, gross lending in the UK mortgage market will decline by 9% in 2008
  • Figure 11: Nationwide grew its mortgage business by a significant 37.9% over the 2006-07 period
  • Figure 12: HBOS has been losing mortgage market share over the years
  • Figure 13: All top 10 lenders increased their mortgage balances over 2007 but some lost market share
  • Figure 14: 48% of UK mortgage lenders are building societies
  • Figure 15: Average interest rate on fixed rate mortgages has continued to increase despite recent cuts in the base rate
  • Figure 16: UK banks have turned increasingly towards wholesale mortgage funding in recent years, 2000-07
  • Figure 17: The UK market for residential mortgage-backed securities has grown substantially in recent years, 1999-2006
  • Figure 18: Northern Rock has been increasingly dependent upon wholesale funding, particularly securitization, June 1998-June 2007
  • Figure 19: Major UK banks and others would face a significant funding shortage were they unable to access funding through securitization and the wholesale markets, 1997-H1 2007
  • Figure 20: More than 10% of respondents stated that they might either take out a mortgage or top up or change their existing mortgage in the next five years
  • Figure 21: Participants in higher household income groups are more likely to take out/top up/change mortgage product in the next five years
  • Figure 22: Banks and building societies are most likely to be considered by consumers when choosing a mortgage than other types of organization
  • Figure 23: Consumers are most likely to consider major mortgage players such as HBOS and Abbey when taking out a new mortgage
  • Figure 24: Northern Rock' s popularity among the survey participants fell dramatically after September 2007
  • Figure 25: Face-to-face and the internet are the two most popular methods for seeking information on a mortgage product
  • Figure 26: While 52% of participants would speak to someone face-to-face when taking out a mortgage to find information about the product, 36% will opt for the internet
  • Figure 27: IFAs are more likely to be the point of contact for consumers when seeking out information about their mortgage
  • Figure 28: Face-to-face remains the preferred method by consumers for arranging a mortgage
  • Figure 29: The majority of consumers would never consider digital TV when arranging a mortgage
  • Figure 30: Arrears and repossessions are on the increase in the UK, H1 1994-H1 2007
  • Figure 31: Fund investments are the simplest and most valuable area for financial services companies to launch green propositions
  • Figure 32: Prime residential mortgage deals have decreased significantly since June 2007
  • Figure 33: The number of sub-prime mortgages has halved in one year
  • Figure 34: Mortgages with 100%+ LTV ratios have all but disappeared from the market
  • Figure 35: Average maximum borrowing decreased by £200,000 in H2 2007
  • Figure 36: Mortgage offers for first-time buyers and remortgagers fell sharply in Q2 2008