Equity-release mortgage lending slowed in the first half of this year.
Figures from the Council of Mortgage Lenders show that around 11,200 equity-release loans were made with a total value of around £517m, down from 13,240 loans worth a total of £597m in the second half of 2003.
The figure remains above the 11,870 loans worth £504m made in the first half of last year.
The CML says the slowdown reflects caution from lenders ahead of regulation of lifetime mortgages at the end of October. It also suggests that the slowdown could be due to some older homeowners choosing to trade down to a smaller property to release equity rather than borrowing.
In July, Stroud and Swindon Building Society closed its books to equityrelease new business at least until the onset of regulation while Chesham Building Society has withdrawn its release product.
The CML still expects the release market to continue to grow although it predicts a hiatus as lenders and intermediaries get used to the new conduct of business rules.
Director general Michael Coogan says: “All the indications are that lenders and intermediaries are taking a cautious and responsible approach to opening up the equity release market, which is good news from a consumer protection perspective. Although consumers should think about all their options before deciding on a lifetime mortgage, these types of loans are extremely valuable for particular types of borrowers who are asset-rich but cash-poor, do not want to move and understand the financial implications.”