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Legal and General becomes biggest lifetime lender and predicts £3bn market

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  • 09/08/2017
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Legal and General becomes biggest lifetime lender and predicts £3bn market
Legal and General has become the largest provider of lifetime mortgages and predicts the market will reach £3bn in 2017.

Its Home Finance division wrote £424m of mortgage advances in the first half of 2017, up 84% from £231m during the same period last year, claiming a 30% lifetime mortgage market share.

According to its half year results the business has around 16,000 customers with an average age of 70 and weighted average loan-to-value (LTV) of about 28%.

The lender is also bullish on future prospects for the market, expecting it to continue growing strongly.

It said: “With an estimated £1.5tn of housing equity currently owned by the over 55s in the UK, the long-term growth characteristics of this market are strong, and we expect the market volume to reach £3bn in 2017, up from £2.2bn in 2016.

“We are also delivering solutions for customers with maturing interest-only mortgages.”

Legal and General’s housing assets also increased over the first six months of the year to £416m, up from £377m in 2016.

Last week the lender announced it was entering the later life housing market.

 

Profits up

Legal & General Retirement, which includes the Home Finance organisation saw operating profits rise by 40% to £566m (from £405m).

Overall, Legal and General as a whole saw profits after tax rise 43% to £952m (from £667m in 2016) in the six months to June.

Its UK protection operating profit decreased by 13% to £90m driven by a £26m loss in the group protection business.

However, the business said its UK retail protection offering continued to generate good profits through consistent performance.

 

Rising demand

Legal and General Home Finance managing director Steve Ellis (pictured) said: “Today’s results show that we continue to go from strength to strength, meeting the rising demand from consumers who increasingly want to access the equity stored in their home to fund retirement.

“I am immensely proud of the work the team at Legal and General Home Finance has done to put us in this position, but as a lender that has a responsibility to this market there is of course more we can do.

“For our adviser partners and our customers, innovation, distribution and flexibility remain key to our growth mission and the story has only just begun,” he added.

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