Abbey set to become Britain’s top mortgage lender

High Street lender Abbey is set to overtake Halifax as Britain’s biggest mortgage company for the first time ever.

Abbey, which is owned by Spanish bank Santander, is due to announce tomorrow that it gained over 25% of all new mortgages sold in the first half of 2008 - up from its previous share of only 10%, allowing it to achieve the number one spot held by the HBOS-owned Halifax.

Abbey recently said it had experienced a high share of the market during the year because it had ‘little or no exposure‘ to the complex mortgage-backed investments of its competitors.

Its rivals have been scaling back their mortgage product range as a result of the credit crunch but Abbey has trebled its share of new mortgages to 15.9% in the first quarter of the year from only 4.9% the previous year.

Furthermore, the good news continues as Santander is set to show profits rising to £4.87 billion in the first half of 2008, up from £3.58 billion.

Other High Street banks are due to announce falling profits over the next few weeks due to further write-downs against investment in US mortgages.

As Abbey reveals it is to overtake HBOS as Britain’s leading lender, the pressure will mount on the bank after it disclosed last week that only 8.29% of shareholders have signed up to its £4 billion rights issue.

In related news, Santander is set to boost its presence in the UK with a takeover of Alliance & Leicester (A&L) worth £1.3 billion.

Santander is proposing to merge A&L with Abbey, which it purchased in November 2004, which has led to concerns about job losses.

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