Virgin plans to double Northern Rock lending

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

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 five years, although it will not confirm how the money would be distributed over the period.

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

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

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

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.”