MortgagesJun 22 2015

L&G unveils own-brand lifetime mortgage

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L&G unveils own-brand lifetime mortgage

Legal and General has launched its own branded lifetime mortgage product range, following the acquisition of specialist equity release provider Newlife in April.

Lending is expected to exceed £100m this year, with a significant increase in 2016 as many more customers benefit from competitive interest rates and flexible products.

According to a Mintel report on the equity release industry in May, the market grew by 29 per cent in 2014 and is forecast to grow to over £2.3bn by 2019, as over 60’s in the UK own nearly £1,300bn of housing equity.

L&G is making further investment in the operational capability of the new division, with a range of improvements to products and services due to deliver later this year.

Bernie Hickman, managing director for individual retirement at the firm, said the launch of Legal & General Lifetime Mortgages marks an important point in the evolution of the retirement business.

“In the UK there is a clear need for housing to play a more central role in helping create better outcomes for more people, particularly as they progress deeper into retirement. The market is growing and we want to be known as a brand that helps more and more people release the money tied up in their property.”

Mr Hickman previously told FTAdviser that one of the ideas they intend to explore is a five-year fixed rate interest-only mortgage for those in retirement, with the option to transfer into a lifetime mortgage at the end of that term, which he said would help bring more people in at higher loan-to-values.

The group believes that its entry into the market will stimulate the supply of competitive products, something welcomed by Key Partnerships’ business development director Will Hale.

“It’s early days but so far we have been impressed with both their offering and their commitment to bringing a range of new products to the market coupled with a service proposition that will make life easier for both us and our clients,” he stated.

Nigel Waterson, chairman of the Equity Release Council, added that strong demand for equity release is all but guaranteed as the population ages and its housing wealth grows to a size far greater than many people’s pension assets.

“This is an exciting time to be part of a rapidly growing industry, and we hope to welcome more new providers and advisers to the existing ranks in the months ahead.”

peter.walker@ft.com