Northern Rock mortgage lending increase prior to Virgin buyout.
Prior to its January buy out Northern Rock mortgage lending experienced a significant increase.
Virgin purchased the Northern Rock mortgage lending arm for £747 million. Previously owned by the British taxpayer, the bank had a pre-tax loss in 2011 of almost £111 million which was significantly down on the £188 million lost the year before.
Figures show that Northern Rock managed a 17% year on year increase to its gross mortgage lending, which went from £4.2 billion to £4.6 billion in final year under Government ownership.
After the January buy out Virgin Money announced its intention to advance around £45 billion in mortgage lending over the next five years. This figure is almost double Northern Rock's previous annual lending level.
End of year accounts to December 31 2011 reveals that net mortgage lending for residential property was £1.8 billion. Average loan to value for new lending during the period was 70%.
The percentage of Northern Rock mortgage arrears increased by 0.11 to 0.28% in 2011, which has been attributed to the 'mature nature' of the mortgage book and the challenging economic times.
According to the lender the majority of Northern Rock funding comes from retail deposits which should enable it to compete well on rates with other lenders. Already a drop in swap rates has enabled Virgin to cut Northern Rock mortgage rates.
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