Newcastle Building Society is the 13th largest building society in the UK, with assets under management in excess of £3 billion.
Hodge Equity Release is a major equity release provider to the IFA market. It boasts an impressive track record in the sector having introduced the first home income plan in 1965 and it has an enviable share of the equity release market for sales conducted through IFAs. Hodge Equity Release is the trading name of Julian Hodge Bank Limited and Hodge Life Assurance Company Limited and markets the equity release products of the two companies.
The alliance with Hodge Equity Release sees the Newcastle acquiring £20 million of equity release mortgages from the Cardiff-based "Equity Release Specialist", with a commitment for further facilities in the future.
Angus Macnaughton, Corporate Development Executive of Newcastle Building Society, commented "Hodge Equity Release was the obvious choice when looking for a strategic alliance in this market. Its specialist expertise, excellent distribution channels in the IFA sector and proven track record made it a very attractive business partner".
The deal enables Hodge Equity Release to continue its rapid growth in the equity release market, which has recently seen its loan portfolio pass £200 million. Jon King, Managing Director of Hodge Equity Release said,
"Our unprecedented success has been the result of many different factors. These include offering an extensive range of products; providing a high quality service; distribution through Independent Financial Advisers, thereby ensuring our customers receive professional and impartial advice, coupled with the knowledge and expertise of our staff.
In the recent past we have been contacted by a number of financial institutions to assist with their expansion plans but we were particularly delighted when Newcastle Building Society approached us to join forces in this initiative. We believe the customer-focused approach offered by both companies is a good match and we are confident that all our customers and IFAs will benefit from this alliance".
As a result of this arrangement, Hodge Equity Release has acquired additional funding capacity to continue the significant expansion of its new business.
Hodge Equity Release will continue to administer the mortgages acquired by Newcastle Building Society throughout their duration, fully utilising its knowledge and expertise in dealing with the particular requirements of the equity release customer, which has been built up over many years.
The alliance is already producing tangible benefits for new customers. Jon King said today "As a direct result of the Newcastle Building Society alliance, the Hodge Equity Release mortgage interest rate for new customers is to be reduced from 7.15% to 6.99% with immediate effect, making the product even more competitive."
