Last year the lifetime mortgage market continued to grow, driven by increased demand from consumers and increased supply from insurers.
The loan-to-value ratio of the mortgage portfolio at 31 December 2018 was 32.5 per cent, up from 29 per cent in 2017. The percentage of lifetime mortgages remained the same at 37.4 per cent of financial investments.
Loans secured by residential mortgages increased to £7.19bn from £6.83bn in 2017.
Profit growth
The company has achieved new business profit growth, strong margins and higher sales, despite significant uncertainty during the Prudential Regulation Authority’s (PRA) consultation into equity release mortgages.
New business profits rose by 44 per cent to £244m in 2018.
New business margin stood at 11.2% in 2018, up from nine per cent in 2017 and over three times the level reported in 2015.
The company also reported a growth of 15 per cent in retirement income sales.
Underlying operating profit rose by 31 per cent to £315m in 2018, while adjusted operating profit was down five per cent to £210m.
Capital options
Rodney Cook, group chief executive (pictured), said 2018 was a year of contrasts.
He added: “The board has been determining the optimal capital mix and level in order to provide a stronger capital base to support the development of the group’s capabilities.
“We are today announcing a package of capital actions, including an underwritten Restricted Tier 1 debt offering of at least £300m and an underwritten non pre-emptive equity placing of 9.99% of existing share capital, which will allow the group to maintain its focus on growing profits.
“During the year we have continued to innovate by developing new customer solutions including our ‘Just For You’ mortgage range, our Secure Lifetime Income product, which is a market first, and our new fintech business, HUB Pension Solutions.”
Just Group launched a lifetime mortgage product in June last year, enabling customers to take an initial lump sum payment followed by ongoing monthly payments.
In January the company combined new and existing features of its lifetime mortgage proposition into a single product, with the launch of Just for You Lifetime Mortgage solution, available to borrowers aged from 55 years old.
