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Virgin mortgages to be ‘selective and priced carefully’ as outlook remains ‘uncertain’

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  • 02/02/2021
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Virgin mortgages to be ‘selective and priced carefully’ as outlook remains ‘uncertain’
Virgin Money's mortgage balances dipped over the last three months of 2020 as the bank prioritised “prudent underwriting standards”.

 

The lender reported a mortgage balance of £58.2bn to the first quarter of its financial year to the end of December, which is down 0.2 per cent.

The group said it had focused on margin management as well as underwriting standards as a result of the “uncertain” economic outlook.

Over the coming months the removal of the stamp duty holiday may see volume slow, Virgin said in a results statement. The lender added that it will continue to be “selective, focusing on balancing volumes and pricing carefully”.

At the same time, Virgin set aside £726m for loan losses but returned to statutory profit in the first quarter of the year.

The proportion of Virgin customers needing further support after ending mortgage payment holidays has “increased modestly” and is within the level assumed by provisions, according to the lender.

Customers have been granted £12.1bn of mortgage payment holidays to the end of December 2020.

Within the matured holidays 98 per cent have returned to payment, Virgin reported.

As part of a digital drive within the group, Virgin acknowledged the launch of APIs for mortgage intermediaries.

At the end of last year, the lender announced its integration with Twenty7Tec.

Chief executive David Duffy said: “We have made a good start to the year with the launch of new customer propositions, further roll-out of our rebrand programme and a return to statutory profit, while maintaining a disciplined approach. The group remains strongly capitalised and we have good momentum as we look out into the remainder of the year.

“Given the current UK-wide restrictions and ongoing uncertainty, we maintain the cautious economic outlook we outlined in November and our full year guidance remains broadly unchanged.

“Looking ahead, the vaccine roll-out and EU trade deal are encouraging for the UK’s economic recovery and we remain focused on disrupting the market through a variety of innovative new products and propositions with a customer and brand experience that is the best in the market.”

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