Virgin Money has seen demand for greater choice in higher loan-to-value mortgages and has promised to continue to grow this lending, as well as innovating product design.
Speaking to FTAdviser, the lender’s mortgages director Peter Rogerson, said that the lender is also re-thinking re-mortgaging this year, suggesting there is pent up demand in the market.
“If we can create the right products then I’m confident 2015 will match the growth we saw last year. There has been demand across the piece as confidence seems to be strong.
“We had buy-to-let expansion in the 75 per cent LTV bracket and generally that type of lending is strong.”
The bank has been busy in the last few months, launching an intermediary exclusive two-year fixed rate deal at 1.84 per cent, on a 65 per cent loan-to-value with a £995 product fee, earlier this month.
In November, third quarter results showed that mortgage completions were up 19 per cent, compared to the average of the first two quarters, while the overall mortgage book increased by three per cent to £20.9bn at the end of September.
This was followed by a number of rate reductions on its Rapid Remortgage range, which followed similar cuts on core mortgage and intermediary exclusive products in September.
Also in September Virgin Money released the market’s only six-year fixed rate mortgages. Mr Rogerson said that the bank felt compelled to look at longer fixed terms towards the end of last year as demand began to shift beyond five-years.
As for the rising trend in 10-year deals, he said it was a possibility being looked at, but gave no further details.
David Hollingworth, associate director of communications at London and Country Mortgages, told FTAdviser that while 10-year fixed rate mortgages were becoming popular as people recognise money will be cheaper for longer, they were never likely to be a mainstream product.
“Many don’t want to lock in, as while you can move the mortgage to a new property, there’s no guarantee of their ability to top up further down the line.
“It is good to see that lenders are looking beyond traditionally popular two, three and five-year deals, as a broker we always welcome choice.”
Recent suggestions that this year mortgage providers will increasingly look towards criteria in order to achieve the lending levels the market needs were shared by Mr Rogerson, although he noted that pricing would still be critical in a very competitive market.
He added that Virgin Money was already compliant with the Mortgage Market Review rules, but that it is possible some lenders will have to tighten affordability processes further.
peter.walker@ft.com
