Established as a financial services company offering offset as well as flexible mortgage facilities for UK residents only, the One account  is generally regarded as the company largely responsible for pioneering the this type of forward thinking mortgage facility in the UK. The company initially conceived as a joint venture between Sir Richard Branson’s Virgin Direct and the Royal Bank of Scotland. Established in 1997, the One Account, or the Virgin One account as it was originally known gained its distinction as well as its name by offering an offset mortgage option, destined to work in the following manner.

An offset mortgage was designed to be used to purchase domestic property only. The attraction for home owners, and especially first time buyers with limited equity was that it is always possible for the home owner to reduce the levels of interest charged on a monthly basis by constantly offsetting the interest against the increasing value of the property through inflation.  If the owner’s current balance was £200,000 and they have a current credit of £50,000, interest is only then charged on £150,000 balance.

One Account would set a credit limit when the mortgage was first taken out, and would allow borrowers to credit and redraw up to this limit during the entire course of the mortgage, with the balance only being reduced to keep in line with the length of the mortgage’s repayment cycle. The reason behind the one account strategy is that the customer only needed one internet based current account to handle all of their finances.

When the company was launched in 1997, at the height of the property boom and when internet banking was just beginning to take off, the project proved to be an initial and instant success, as a result of some very strong promotional activity aimed firstly at Virgin Direct’s almost quarter of a million client base and in the following year to the public at large.  The end of the twentieth century saw Virgin One still on a roll, and their aggressive and hard hitting advertisement campaigns eventually seeing their client base grow considerably. A full internet driven banking service was launched in February 200, and the Virgin One Account bank still remained the talk of the UK banking community, largely due to their “tongue in cheek” advertising style.

 However eventually the One Account Company might have been too hot a handful for Virgin Direct, with the Royal Bank of Scotland eventually achieving majority shareholding in the company in 2003, which they established just to handle mortgages alongside their NatWest and First Active Mortgage Bank subsidiaries.