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Virgin Money mortgage lending grows 12%

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  • 04/03/2014
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Virgin Money mortgage lending grows 12%
Gross mortgage lending at Virgin Money rose 12% in the last 12 months, figures from its annual results have shown.

The Newcastle-based lender saw lending grow to £5.6bn last year. This compared to £4.9bn during the previous year and £3.7bn in 2011, the lender’s final year as Northern Rock.

Net lending increased to £2.8bn in 2013 helping Virgin to a pre-tax profit of £53.4m, this compares with a loss of £2.5m in 2012.

Looking forward to the introduction of the Mortgage Market Review, Virgin said it expected little negative impact on lending volumes as the majority of its mortgage business continues to go through intermediaries.

The lender said it has maintained a strong balance sheet and did not expect the introduction of the Basel III rules with the average LTV of its mortgage portfolio falling from 63.3% to 59.8% year-on-year. The typical LTV for new mortgages was 65.4% in 2013.

Virgin’s results showed buy-to-let products made up 11.6% of its total lending with 84.4% residential home loans and the remainder in credit cards. It said it would look to increase buy-to-let lending to 15% as it attempts to diversify its portfolio.

Jayne-Anne Gadhia, chief executive officer, said: “I am delighted with our performance in 2013. During the year, we maintained the strong momentum that we have established in our core mortgages and savings business, while investing in building the banking capabilities which will enhance our future growth potential.

“The new regime for mortgages, implementing the recommendations of the Mortgage Market Review (MMR), will come into effect on 26 April 2014. We are on track to complete all changes necessary to comply with the new regulations in accordance with this timetable.

“A high proportion of our mortgage business comes through intermediaries, so we do not expect MMR to have a negative impact on our business, and indeed we are very supportive of its aims to improve further consumer protection in this important market.”

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