Who are the Lenders?
In the UK there are over sixty three building societies. Together they have total assets of more than £230 billion. Currently around 15 million of us have building society saving accounts. Around two and a half million adults are currently buying their own homes with the help of building society loans.
However, as many societies have converted into banks and new providers have emerged, their share is now just under 20 per cent. Buliding Societies have no outside shareholders wanting dividends, and are not companies. This normally enables them to run on lower costs and offer cheaper products such as home loans.
Since many Building Societies have become banks, so their share of the residential mortgage market has grown. Many people see their local high street bank as being the first stop when looking for a mortgage deal. Partly because they have confidence in the service provided but also because it has become common to experience a higher degree of selling.
Tellers regularly ask their customers if they would consider taking a mortgage out with them. With a database of existing customers already using them for their personal banking facilities, banks are able to target their customer base on a regular basis with mail shots relating to the mortgage deals they are currently able to offer.
There has been a steady increase in the amount of specialist lenders that focus on a particular area of the market such as the providing products for the self employed or those with a bad credit history.
As many of these providers are smaller than a bank or building society it makes it much easier for them to develop products a lot quicker. Because these companies underwrite each mortgage on an individual basis their interest rates have been a lot less competitive.
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