UK mortgage lending data published according to post codes for the first time

Major mortgage lenders in the UK have today published details for the first time of their total outstanding residential mortgage lending according to over 9,000 post code sectors across the country.

The data includes most buy to let lending as well as home owner lending worth around £855 billion and is  compiled by the Council of Mortgage Lenders, 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 and the British Bankers' Association is simultaneously publishing a similar breakdown of SME lending and personal loans.

Out of the 10,834 sector postcodes in Great Britain data is being published on 9,030 sector postcodes. In addition, there are 1,770 sector postcodes where, according to 2011 Census results, nobody lives and there are 32 sector postcodes where people do live and where participating lenders have mortgages, but aggregate data cannot be reported because it might compromise individuals' data privacy.

There are just two sectors where people live but where participating lenders do not have mortgages. However, 2011 census data suggests that in both localities there were households with mortgages, which could well be provided by non-participating lenders.

The CML says that 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.

The detailed local statistics at sector postcode level provide for the maximum transparency possible without compromising data privacy. However, interpreting them is less straightforward, especially given the significant variation in such factors as house price values, population size and tenure patterns at a local level.

So the CML is also supplying higher level postal area data covering the 120 postal areas of Great Britain. ‘On this basis, we are able to report £891 billion of mortgage lending by the participating lenders, since we are able to include some of the lending that had to be excluded for data privacy purposes from the more detailed sector breakdown, as well as some lending that could not be attributed to a specific sector postcode,’ explained CML director general Paul Smee.

‘As you would expect, strong levels of mortgage lending are broadly correlated with those areas where there is a strong resident population. While the dataset covers only three quarters of the mortgage lending market, it certainly shows that there are reassuringly few surprises in the postcode distribution of mortgage lending,’ he added.

Lenders have taken care to strike a balance between the desire for transparency and the need to protect customer confidentiality. To protect the privacy of business and personal customers, a set of parameters were agreed with the government to ensure customer confidentiality is protected and that there is compliance with data privacy rules. This has led to up to 10% of postcode sectors at aggregate level being redacted.

Business groups have stressed that great care must be taken to ensure that the borrowing of commercial customers cannot be identified.

Lenders report on three separate business streams: SMEs, residential mortgages and unsecured personal loans. All figures reflect the total amount of borrowing outstanding on customer accounts.
 
This figure is likely to fluctuate over time for a number of reasons including new borrowing agreements being entered into, customers repaying borrowing in part or in full, borrowers moving, borrowers switching in and out of alternative finance products and borrowers switching to a different lender.

One of the key roles played by the BBA and CML has been to ensure that participating lenders report as fully and as meaningfully as possible, whilst also adhering to all relevant data privacy, competition and other laws.

Both organisations said that a general level of protection for customers is afforded by publishing postcode figures six months after the end of the reporting period. This is a deliberate part of the design of this exercise, and will be an on-going feature.