Legal & General to enter the lifetime mortgage market by acquiring New Life Home Finance Limited
LEGAL & GENERAL TO ENTER THE LIFETIME MORTGAGE MARKET BY ACQUIRING NEW LIFE HOME FINANCE LIMITED
Legal & General Group Plc, (“Legal & General”) has agreed to acquire 100% of New Life Home Finance Limited (“Newlife”) for a consideration of £5m. 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 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. This mortgage funding will provide another attractive source of direct investment assets to back Legal & General annuity liabilities.
Kerrigan Procter, Managing Director, Legal & General Retirement said:
“We are delighted to announce our acquisition of Newlife and entry into the lifetime mortgage market. Over 60s in the UK have nearly £1.3 trillion in housing equity, and lifetime mortgages can be an excellent way for many people to supplement their retirement income. Legal & General’s acquisition of Newlife allows us to participate in this market which has huge potential while also giving customers wider choice.”
Peter Lucas, Executive Director and Co-founder, Newlife Group
“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. The changes to the pension market from April mean that there are exciting opportunities in this market for the future. 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 with our range of flexible, innovative financial products.”
For further information, please contact:
Head of Investor Relations
020 3124 2088
020 3124 2047
Group Communications Director 020 3124 2090
Head of Group Corporate Communications 020 3124 2095
Notes to editors:
1. Legal & General Group Plc
Established in 1836, Legal & General is a leading provider of insurance, savings and investment management products in the UK. The Group has a market capitalisation of £15.8bn (as at 23 January 2015) and is responsible for investing £676bn worldwide (as at 30th September 2014) on behalf of investors, policyholders and shareholders. We have over 7.9 million customers in the UK for life assurance, pensions, investments and general insurance plans and over one million customers in the US who rely on us for life assurance. In 2013, Legal & General's profits before tax (on the IFRS basis) were £1,134m and earnings per share were 15.20p for the period, an increase of 10% for both respectively.
2. New Life Home Finance Limited
Newlife was originally formed in 2003 with the objective of capitalising on the growing opportunities emerging in the equity release market. It very quickly established itself as one of very few lenders specialising in providing award winning equity release products to the over 60s.
In 2013 Newlife Group was granted full permission by the Financial Conduct Authority (FCA) to administer regulated mortgages from completion to redemption and the business now operates as a full service provider in the retirement market by retailing, underwriting, completing and administering lifetime mortgages and home reversion plans. Its products are retailed exclusively through a fully authorised and regulated panel of more than 700 intermediaries which meet stringent criteria. All of its lifetime mortgages and home reversions comply with the Equity Release Council Statement of Principles.
Newlife Group is a member of the Council of Mortgage Lenders (CML), is authorised and regulated by the Financial Conduct Authority (FCA) and is also a member of the Equity Release Council, the equity release industry trade body.
For more information on Newlife, please see http://www.newlife-uk.com/
Forward looking statements
Nothing in this announcement should be construed as a profit forecast. This document may contain certain forward-looking statements relating to Legal & General Group, its plans and its current goals and expectations relating to future financial condition, performance and results. By their nature forward-looking statements involve uncertainty because they relate to future events and circumstances which are beyond Legal & General's control, including, among others, UK domestic and global economic and business conditions, market related risks such as fluctuations in interest rates and exchange rates, the policies and actions of regulatory and Governmental authorities, the impact of competition, the timing impact of these events and other uncertainties of future acquisition or combinations within relevant industries. As a result, Legal & General Group's actual future condition, performance and results may differ materially from the plans, goals and expectations set out in these forward-looking statements and persons reading this announcement should not place reliance on forward-looking statements. These forward-looking statements are made only as at the date on which such statements are made and Legal & General Group Plc does not undertake to update forward-looking statements contained in this document or any other forward-looking statement it may make.