Competition between providers in the mortgage market is growing as activity in the housing sector picks up, a lenders' group has said.
The UK's six biggest lenders were responsible for more than 90% of gross mortgage lending at the height of the financial crisis in 2009.
But this fell to 77% last year, according to new figures from the Council of Mortgage Lenders (CML).
The figures come as the Land Registry reports a lift in property prices.
It said that average prices in England and Wales rose by 1% in July from the previous month, and were up 0.8% compared with a year earlier.
But greater market activity is still being driven by property transactions in London, the figures show.
The mortgage market shrank during the financial crisis, with lenders drawing back on offers and consumers playing safe instead of buying a new home.
Consequently, a number of lenders merged and the largest were responsible for the lion's share of a relatively small pot of lending.
However, some of them have drawn in lending since, while some smaller operators have become more aggressive.
In 2012, gross lending remained static compared with 2011, but the big six - Lloyds, the Nationwide, Barclays, HSBC, Santander and RBS - reduced their share from 81% to 77%.
"Competition in the market is growing, bringing with it benefits to consumers shopping around for the mortgage deal to best suit their needs," the CML said.
Lloyds Banking Group remained the largest lender, with an 18.3% market share of gross mortgage lending. Nationwide rose from fourth in the rankings in 2011 to second in 2012, with a 14.8% share of gross lending.
Barclays was third in 2012, HSBC fourth, Santander fifth - having been second in 2011, and RBS sixth.
London market 'rocketing'
The Land Registry figures show that recent housing market activity in England and Wales has been driven by the London property sector.
Average prices in the capital rose by 2.1% in July from the month before. The annual price increase stood at 6.3%.
In contrast the annual price change showed a fall in north-east England, in Yorkshire and the Humber, in north-west England and in Wales.
"London property is rocketing especially at the top end of the market. A significant percentage of these sales are to foreign investors that continue to buy up large swathes of the best real estate in the capital," said Jonathan Hopper, managing director of property search consultants Garrington.
The average home in England and Wales is now valued at £164,098, the Land Registry said.
Housing charity Shelter said that the increase in prices was leaving some "forgotten families" priced out of the market - especially if they were aiming to get onto the ladder or move to a more adequately sized family home.
It is calling for a new building programme of shared ownership homes as part of a mix of housing stock. This would allow families to own part of the home, through a mortgage, while paying rent on the rest.
"The reality is that soaring house prices mean that the traditional market is no longer working for ordinary people," said Kay Boycott, director of campaigns and policy at Shelter.