The firm today published its results for the first half of the year, revealing that the Legal and General Mortgage Club facilitated £48bn worth of mortgages in the period, down slightly from the £50bn distributed in the same period of 2022.
It put this down to higher interest rates pushing down demand for mortgages, with the company arguing that it remains the largest participant in the intermediary market, with an involvement in around a fifth of all UK mortgage transactions.
Lifetime and retirement interest-only advances from Legal and General have dropped significantly over the last year. In the first half of 2023, the firm advanced £163m of new loans according to the results, less than half the £338m advanced in the first half of 2022.
Again L&G said this reflected a decline in demand as a result of rising interest rates. It added: “Throughout this period, we have maintained pricing and underwriting discipline.”
Rise in protection income
On protection, the firm said the income from its retail protection business rose from £740m to £752m, in what it noted was an “increasing competitive market”. The company said that it remains the market leader, with a share of almost 20 per cent. It also reported a jump in annuity sales, as retirees opt for the certainty of an ongoing income in retirement, buoyed by higher interest rates. L&G said it expects this trend to continue.
The report also highlighted the profitability of its housing ventures, with its housing portfolio growing to £2,246m from £2,190m.
For example, Cala ‒ L&G’s build-to sell business ‒ brought in profit before tax of £73m (down from £98m in the first half of last year), through the same of 1,428 units. The affordable homes business meanwhile has an operational pipeline of 6,766 properties, with a gross asset value of around £1.2bn.
Despite the troubles of the mortgage market, Legal and General has enjoyed significant profitability over the opening half of the year. It reported an operating profit of £941m, down only marginally from the £958m reported in the same period of 2022.
However, its profit after tax has dropped from £575m to £316m.
Sir Nigel Wilson, group chief executive of L&G, said that the firm is on track to achieve its five-year ambitions and deliver attractive returns to its shareholders.
He added: “I’d like to thank my colleagues for their contribution and ongoing commitment to inclusive capitalism, serving our shareholders, customers and wider society.”
