Northern Rock pulls plug on lifetime deals
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Northern Rock has decided to with-draw lifetime mortgages from its product range, joining the long list of providers to pull out of the sector in recent weeks.
The lender says it will honour existing applications and that terms and conditions for life-time mortgages currently in place will still apply.
A spokeswoman for Nor-thern Rock says the decision to pull out was the result of a product review.
She says: “These products have seen little customer demand and volumes of lifetime applications have been low, so it is no longer a core part of our product range.
“Lifetime products will not form part of our strategy going forward.”
Jon King, managing director of Hodge Lifetime, says: “Northern Rock was quite a big player in the equity release market before the credit crunch hit.
“But since that time it has been doing decreasing volumes of this type of business.”
In the past two months Saffron Building Society and Coventry Buil-ding Society have both suspended equity release lending, while Newcastle Building Society has revealed that it intends to close its equity release service by the end of the year.
Earlier this year equity re-lease specialist In Retirement Services went into administration and Retirement Plus decided to suspend new equity release lending.
Dean Mirfin, group director at Key Retirement Solutions, says that before the crunch Northern Rock did a reasonable volume of equity release business both direct and via brokers, but the run on the bank in 2007 and its subsequent nationalisation badly affected this.
He says: “This decision comes as no surprise. And it does not seem like something that has been rushed through either because we’ve not seen a big drive in the equity release market from Northern Rock. In fact, it was inevitable.”
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