Legal & General to enter lifetime mortgage market
Legal & General Group has announced its intention to acquire 100% of New Life Home Finance Limited for a consideration of £5 million (€6.7 million). Newlife is a privately owned UK-based provider of lifetime mortgage products. The acquisition by Legal & General’s Retirement division is expected to complete during H1 2015, subject to FCA approval.
Newlife was founded in 2003 to manufacture and provide lifetime mortgages. These products are designed to assist homeowners to raise cash against the security of their property while continuing to own and live in their homes.
Legal & General has also entered into a funding agreement to be the sole funder of new lifetime mortgages originated by Newlife.
Bernie Hickman, Managing Director of Legal & General’s Individual Retirement business said: “We are delighted to announce our acquisition of Newlife and our entry into the lifetime mortgage market. Over 60s in the UK have nearly £1.3 trillion (€1.75 trillion) in housing equity and we believe lifetime mortgages will become an increasingly popular way for many people to supplement their retirement income.
“Legal & General’s acquisition of Newlife allows us to participate fully in this market, which we believe has huge potential. With close to £40 billion (€54 billion) of annuity assets, we have considerable capacity to provide future funding in this growing market.”
Peter Lucas, Executive Director and Co-founder, Newlife Group said: “We are looking forward to being part of Legal & General and to continue to build on the successful base we’ve established in the lifetime mortgage market. With Legal & General’s reputation as a highly regarded customer focused brand and access to their distribution networks, we will be able to help meet the needs of more customers and so become a leader in this growing market.”