Leader: Virgin news is a good omen

The news that Virgin Money will enter the mortgage market at the end of 2010 is good for the sector, and it will be even better if it ends up using brokers.

What is desperately lacking from the market at the moment is competition and the only sure-fire way to remedy that situation is to have new lenders coming in.

We’ve recently seen new names such as Aldermore Mortgages emerge, watched old brands like Kensington return and even heard rumours about Mortgages PLC and Deutsche Bank resurfacing. In reality, it’s unlikely any of these brands alone will make a significant difference to the gross lending figure for 2010 but they will be vital to the market’s future.

So while things are still tough, keep in mind that lofty oaks from tiny acorns grow.

Also, in this week’s issue we report on our recent round table discussion on the future of the equity release market, held in conjunction with Hodge Lifetime.

Like the rest of the mortgage market the equity release sector had a difficult 2009 and was somewhat winded by the shock exit of Prudential.

While some continue to question the logic of equity release there are two key factors that make the product difficult to ignore – first, we aren’t getting any younger and we’re taking longer to die and second, the average pension won’t be sufficient to provide a decent income in retirement.

But the market needs to develop and the lively debate at the round table clearly shows the equity release sector’s willingness to adapt both advice and products to better cater for the elderly of tomorrow.