Abbey claims 17% of new mortgage business

In the first-quarter of this year, Abbey, the Spanish-owned bank, has increased its share of the residential mortgage market to the extent that industry experts believe it is now writing one in six of all new mortgages.

Mortgage brokers are ranking the bank as the UK’s second biggest lender (behind HBOS) with a market share of around 17% for new business.

Last year, Abbey was pushed into second place in terms of market share, by the merger of Nationwide and Portman Building Society.

The news supports the Council of Mortgage Lenders’ argument that the Bank of England has not given sufficient support to the UK mortgage sector.

The credit crisis left most lenders struggling to raise capital but Abbey has been able to source funding from the European Central Bank (ECB), because of its Spanish credentials.

Santander, Abbey’s parent company, has been able to raise money from the ECB using a greater range of securities against loans than currently accepted by the Bank of England.

In addition, the ECB has not cut interest rates since the onset of the credit crisis and is lending to member banks at 4%, compared with the Bank of England’s 5%, after three cuts in the base rate since December.

Abbey has found itself in the enviable position of being able to encourage new customers when other lenders, notably Northern Rock, have been turning away new business by raising interest rates and deposit requirements.

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