Legal & General Group is to acquire 100% of New Life Home Finance for £5 million, subject to regulatory approval.

Newlife is a privately owned UK-based provider of lifetime mortgage products and L&G hopes to complete the deal during the first half of 2015.

Legal & General has also today entered into a funding agreement to be the sole funder of new lifetime mortgages originated by Newlife. This mortgage funding will provide another source of direct investment assets to back Legal & General annuity liabilities.

Bernie Hickman, managing director of Legal & General’s individual retirement business said: “We are delighted to announce our acquisition of Newlife and our entry into the lifetime mortgage market. Over 60s in the UK have nearly £1.3 trillion in housing equity and we believe lifetime mortgages will become an increasingly popular way for many people to supplement their retirement income.

“Legal & General’s acquisition of Newlife allows us to participate fully in this market, which we believe has huge potential. With close to £40bn of annuity assets, we have considerable capacity to provide future funding in this growing market.”

Peter Lucas, executive director and co-founder, Newlife Group, added: “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.

“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 and so become a leader in this growing market.”