Legal & General Mortgage Club arranged £34bn of mortgages in the first six months of 2020, down six per cent, while group profits fell 67 per cent due to the Covid-19 pandemic.
In H1 2019, the value of mortgages arranged by the club was £36bn.
The scale of the housing market lockdown was also indicated as the surveying services arm of L&G carried out 185,000 surveys and valuations during the period compared to more than 250,000 in H1 2019.
Falling lifetime sales
The impact of lockdown and the uncertainty brought about by the coronavirus pandemic also affected the group’s volume of lifetime mortgage sales and annuities.
Lifetime mortgage sales fell year-on-year by 26 per cent from £489m to £362m. Sales of annuities also decreased from £489m to £421m year-on-year.
In its H1 update, the group said global disruption following the outbreak of coronavirus had caused a temporary dip in demand for retail retirement products, but it did not expect this to alter the long-term direction of growth for this market.
The physical restrictions of lockdown, said L&G, had driven it to improve its technology which made it easier for customers to access its products and has seen demand rebound in June and July.
“We are actively seeking solutions to address the needs of the 1.5 million UK workers aged over 50 who report that they intend to delay their retirement as a direct result of the pandemic,” the group added.
Covid-19-related claims and a future provision for such claims has cost Legal & General £80m but it said the “tragically disproportionate” impact of the pandemic on older people has meant a reduction of £32m in the group’s retirement payments.
L&G’s profit after tax slumped by 67 per cent from £874m to £290m year-on-year. Operating profit fell by six per cent from £1bn to £946m as L&G took a £129m hit from the impact of coronavirus.
Despite the blow to the group’s profits, L&G said the business continued to perform resiliently, and reported growth in three out of five of its divisions.
The group will pay the same dividend of 4.93p per share as did it last year.
Nigel Wilson, group chief executive, said: “In H1, Legal & General delivered resilient operating profits, a robust balance sheet and highly relevant products and services. Our ambition is for a similar performance in H2.
“We kept all our employees on full pay, executed significant commercial and investment projects, and continued to provide a reliable service to our customers without any government financial support.
“We are committed to driving forward an investment-led, climate-friendly Covid recovery incorporating the very best aspects of inclusive capitalism.”
Samantha Partington is a freelance trade and consumer journalist writing about property and personal finance. Previously she worked worked for the Daily Mail and Property Week. She is the former deputy editor of Mortgage Solutions and editor of Specialist Lending Solutions.
Before becoming a journalist, Samantha worked as a mortgage broker and latterly for a mortgage, bridging and secured loan lender. Samantha is CeMAP qualified. Follow her on Twitter @SamJPartington1.