Mortgage lending by postcode
Major mortgage lenders have published updated figures for their total outstanding residential mortgage lending (including most buy-to-let lending as well as home-owner lending) broken down by around 9,000 postcode sectors (and 120 postcode areas, which cover a number of sectors) across Great Britain at the end of September 2013.
The aggregate mortgage data, compiled by the CML, covers Barclays, HSBC, Lloyds Banking Group, Nationwide Building Society, Santander UK, RBS, and Clydesdale and Yorkshire Bank, who together represent about 73% of the total mortgage market. These lenders are also publishing their own lending data by postcode on an individual basis.
The British Bankers’ Association is simultaneously publishing a similar update on lending to small and medium sized enterprises (SMEs) and personal loans.
This is the second quarter of reporting this data. Since the previous publication, reporting firms have improved the coverage of the figures being reported such that the breakdown of an additional £7bn of mortgage lending by sector postcode in now published.
However, when interpreting how figures have changed over time it is important to bear in mind that movement may not reflect an actual change, but could be the result of the customer confidentiality tests or the improvement in the volumes of data being reported (see notes to editors). This is particularly true at individual postcode sector level.
These distorting effects are reduced at higher levels of geography. Looking at postal area figures for example, the value of lending in nearly every area is within 2% of the previous figure.
Out of the 10,834 sector postcodes in Great Britain:
– Only 9270 are geographic in nature. The remaining sectors exist for mail direction purposes only and do not necessarily represent a geographic area, as such are unlikely to be relevant to mortgage lending.
– Data is being published covering 8,996 geographic sector postcodes, covering mortgage lending worth around £891.5bn.
– There are 33 sector postcodes where 2011 census data shows people do live and where participating lenders have mortgages, but aggregate data cannot be reported because it might compromise individuals’ data privacy.
– There is only one sector that is geographic in nature and where people live but where participating lenders do not have mortgages (however, 2011 census data suggests that there were households with mortgages in this sector, which could well be provided by non-participating lenders).
When interpreting these detailed figures, it is important to bear in mind that this postcode reporting exercise initially only covers lenders accounting for around three quarters of the overall mortgage market. With more than 100 active lenders, the mortgage market is fiercely competitive, and this means that local markets may display different market share characteristics.
CML chief economist Bob Pannell said: “Unsurprisingly, with data covering outstanding lending rather than new flows, there are only small changes since the last quarter. It is likely to take some time before any discernable changes or trends emerge from this quarterly data series.”