Virgin Money sees long-term mortgage improvements despite recent dip

Virgin Money sees long-term mortgage improvements despite recent dip


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High street bank Virgin Money UK says there is light at the end of the tunnel for mortgages and the housing market, despite a dip in volumes in recent months.

In a trading statement to investors it says there’s been a 2.2 per cent decline in its mortgage lending to £57.1 billion in the three months to December, from £58.4 billion in the same period at the end of 2022.

The company says this is down to the much-publicised subdued housing market amid high interest rates – but Virgin says that 2024 has started in better style.

Residential and buy to let mortgage applications for early 2024 are close to 2019 levels and Virgin Money says it believes interest rates have peaked.

Outside of our mortgage lending, Virgin says provisions for bad loans have grown by around five per cent; cash deposited with the bank grew by 1.7 per cent to £67.3 billion in the final quarter of 2023, slightly up from £66.2 billion the previous year.

Moving on to cost-cutting measures, the bank has told its investors that it will save £200m annually through restructuring, having closed 39 branches; this leaves a network of 91 bricks and mortar stores.

Chief executive David Duffy says: “Looking ahead, the Group expects customer sentiment in mortgages to continue to improve, given the emergence of more positive trends at lower customer rates … We are encouraged by both our customers’ resilience and improving sentiment in the mortgage market as interest rates have peaked.”

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