Santander UK Sees £2.5bn Fall in Q1 Mortgage Lending

Santander UK reports a £2.5bn fall in mortgage lending in Q1, citing 'disciplined pricing actions'. The lender's UK pre-tax profits tumbled 29% to £391m, citing higher deposit and operating costs.

Santander UK Posts £2.5bn Fall in Q1 Mortgage Lending

Santander UK has reported a £2.5bn fall in mortgage lending in the first quarter of the year, citing “disciplined pricing actions”. The British arm of the international bank saw home loans slip 1.4% to £172.7m in March from the end of last year.

Santander UK logo

The lender’s UK pre-tax profits tumbled 29% to £391m, citing higher deposit and operating costs. Its net interest margin - a key measure of interest paid on deposits against interest earned on loans - was down 4 basis points to 2.07% from the previous quarter and 14bps lower than a year ago.

“We intend to continue to prioritise profitability, capital generation and our core banking franchise in 2024, through planned balance sheet optimisation, resulting in lower mortgage lending and customer deposits.” - Santander UK

Santander UK chief executive Mike Regnier added: “This quarter’s results are in line with our expectations. We have seen encouraging growth in our corporate and commercial business using our global network to help businesses into new markets. We also launched new products to support our customers’ changing needs, including the Edge credit card with cashback and 95% LTV mortgages for new build properties - supporting aspiring homeowners, particularly first-time buyers.”

The recent fall in the rate of inflation will be welcomed by our customers who continue to face cost of living pressures.

![Mortgage graph](_search_image mortgage rates) Mortgage rates

Meanwhile, the wider Santander group posted a rise in quarterly profit up 11% to €2.9bn (£2.5bn) as it benefitted from higher interest rates across its various markets around the world.

In other news, Aldermore has announced the reintroduction of a broader range of mortgages for self-employed and first-time buyers. Sesame Network and PMS Mortgage Club have also added Perenna to their lending panels.

Mortgage approvals for house purchases lifted 1.3% to 61,300 in March from February, according to the Bank of England.

![House purchase](_search_image house purchase) House purchase

HSBC, on the other hand, reported a small fall in profits due to a drop in mortgage lending.

HSBC logo

The mortgage market continues to evolve, with lenders adapting to changing market conditions and customer needs. As the cost of living remains a pressing concern for many, it will be interesting to see how the industry responds to these challenges in the coming months.