Value of applications rises at L&G club but it sees tough times ahead

BEN THOMPSON: WE HAVE MADE GOOD PROGRESS
BEN THOMPSON: WE HAVE MADE GOOD PROGRESS

Legal & General Mortgage Club increased the value of its mortgage applications by 17% in the first six months of the year compared with the first half of 2009.

It handled more than £7bn of mortgage applications between January and June this year. The value of its mortgage completions also rose 19% to £5.2bn compared with the same period last year.

Ben Thompson, director of mortgages at L&G, says: “Our members have distributed a huge amount of mortgages to lenders on our panel and seen encouraging progress in product development.

“Working with lenders we have managed to bring new credit to the market as well as innovative products, many of which have been exclusive to us. I’m pleased with this strong half-year performance by our members.”

Overall, L&G’s pre-tax figures jumped from a loss of £143m in the first six months of 2009 to £537m in the first half of this year.

Its operating profit rose by 34% to £542m and its net cash generation rose by 19% to £358m. Half-year dividend jumped by 20% to 1.33p per share.

But its results statement is downbeat about the prospects for the mortgage and housing markets.

It states: “There’s no sign of material recovery in the housing market and we expect mortgage supply and transactions to remain depressed into 2011. This, coupled with economic uncertainty, means we are likely to see limited growth in protection markets this year.

“Competition remains intense although we expect to benefit from consolidation and exits by competitors that do not have the scale to compete.”

The firm’s balance sheet is split, with £320bn in fund management, £56bn in savings and £24bn in annuities.