Virgin Money is gearing up to launch its much-anticipated mortgage range by the end of the year and is considering using brokers, Mortgage Strategy can reveal.
Virgin Money, part of Sir Richard Branson’s Virgin Group, says that its products will initially be available direct but it regards brokers as a key distribution channel.
A spokesman for Virgin Money says since it was granted its banking licence it has planned to launch a range of savings products. This is likely to happen in the summer, followed by the launch of mortgages.
This is the first time the company has put a timeframe on when it will launch a mortgage range.
The spokesman says: “The mortgage launch is likely to be by the end of this year and will be funded from our deposits.
“We can’t rule out using brokers as they are a key distribution channel. It won’t be this year but we will be looking at moving beyond our direct and telephony channels to use intermediaries.”
Virgin Money entered the retail banking market in January, with the acquisition of small private bank Church House Trust providing it with the platform it needed to launch its UK banking business.
US investor Wilbur Ross has put £100m into Virgin Money in exchange for a 21% stake. He has also pledged £500m to power Virgin Money’s bid to buy the 318 Royal Bank of Scotland branches currently up for sale after the part-nationalised bank was ordered to offload them by the European Commission.
Ross was part of Virgin Money’s attempt to refinance Northern Rock in 2007 and 2008, before the bank was nationalised.
Jonathan Clark, mortgage partner at Chadney Bulgin, says: “Virgin has always been an innovative organisation and it was the first to come out with the One account.
“Although we won’t be able to access its mortgage deals immediately it’s good news that another lender is coming to the market. It keeps others on their toes and shakes the sector up.” And Andrew Montlake, director at Coreco Group, says: “The more talk there is about new lenders the more positive it is, especially if they use brokers.
“Competition sparks innovation – it just comes down to what distribution route these lenders are going to take.”
Other new entrants known to be looking to stake a claim in the UK mortgage lending market include Metro Bank, Aldermore, Tesco and the Post Office.