Virgin looks to double Northern Rock lending to £9bn a year

Virgin Money plans to double the value of mortgage lending at Northern Rock.

It says it aims to advance around £45bn in mortgage loans over the next five years.

The target means it would lend an average of £9bn a year for the next half decade, although it will not confirm how the money will be distributed over the period and what percentage will go to brokers.

In 2010, Northern Rock’s gross lending reached £4.2bn and while the figures have not been finalised, a Virgin spokesman says gross lending for 2011 was around £5bn.

He adds: “The combined business aims to lend £45bn in total to customers over the next five years.”

Last month, the Council of Mortgage Lenders downgraded its gross lending forecast for 2012 from £150bn to £133bn due to the likelihood of weak economic activity. It also cut its 2011 gross lending estimate from £140bn to £138bn.

Virgin Money has made a series of promises to brokers, one of which is no dual pricing.

Industry consultant Michael White says: “This is good news for the market. Virgin is saying it has grand plans and intermediaries will benefit from that.”

Virgin bought Northern Rock’s good bank in November in a deal worth £747m, which could rise to over £1bn.