Nationwide has struck a deal to buy Virgin Money in a deal price £2.9billion, creating the UK’s second largest mortgage and financial savings group. The transfer by Nationwide will see it take-on the Halifax to win the crown as Britain’s largest mortgage lender.

Mortgage brokers are divided on whether or not or not the transfer shall be good news for customers. While Nationwide, which is owned by its members, has status for customer support the merger will scale back competitors and selection.

The constructing society introduced its intention to make use of the Virgin model at first however to then steadily part out the branding over the course of six years.

This might depart Virgin Money’s 7,300 workers in danger sooner or later, however Nationwide have confirmed they won't make materials modifications ‘in the near term’.

It is unclear in the meanwhile what number of of those workers will be part of Nationwide’s 18,000 sturdy workforce in the long run.

Virgin Money at present serves round 6.6million prospects whereas Nationwide, the biggest constructing society within the UK, has practically 18million prospects.

This acquisition would make Nationwide the second largest mortgage and financial savings group, solely behind Lloyds Banking Group, which owns the Halifax, with 696 branches.

Nationwide will steadily incorporate Virgin Money however present Virgin prospects is not going to routinely turn into Nationwide members.

For the time being Virgin Money will proceed to function in the identical means as a separate authorized entity. The sale has not been completely finalised because it nonetheless must be backed completely by Virgin’s shareholders.

RBC Capital Markets analyst Benjamin Toms advised Reuters: “With the outlook for the UK economy stabilising, we wouldn't be surprised to see more deals like this announced.

“UK bank valuations are relatively cheap for the sustainable returns they offer.”

Graham Cox, Director at SEMH Self-Employed Mortgages advised Newspage: "Nationwide is firing a shot across the bows of Halifax with this acquisition, threatening their status as the UK's number one mortgage lender by market share.

“Nationwide's reach will also increase banking competition on the high street, which can only be a good thing for consumers, given how complacent some of the established banks are."

Ben Perks, Managing Director at Orchard Financial Advisers, said: "This is quite the power play by Nationwide.”

Justin Moy, Managing Director at EHF Mortgages, stated: "Consolidation throughout the mortgage market is inevitable when skinny margins and diminished utility numbers are set to proceed for an extended time frame.

“This will inevitably reduce competition in the residential market, potentially costing borrowers over the long term, and with the different borrower focus of each lending brand it will be interesting to see what Nationwide would focus on.”

Ranald Mitchell, Director at Charwin Private Clients, stated: "Nationwide are making a bold move with the acquisition of Virgin Money. One way to increase market share is to buy competitors rather than slog it out at the retail end of the market.

“In difficult times, consolidation and mergers become more prevelant, reducing competition and ultimately less choice for consumers."