The lender, which is the latest in a long line of providers to pull back from the sector, says the move is temporary and it hopes to return to the market when funding improves.
Money Marketing first revealed Prudential’s decision to pull out of the market in November, and this followed Northern Rock, Saffron Building Society, Coventry Building Society and Retirement Plus who all previously suspended lending. In Retirement Services went into administration earlier last year.
Following Pru’s exit in November, Stonehaven was one of a number of remaining providers to stress its commitment to the sector and play down fears over funding.
At the time, Stonehaven chief executive Jayne Almond said: “We are backed by a major bank which enables us to fund new lending.”
However, a statement on the firm’s website now says: “All new lending is suspended temporarily. We will continue to honour applications received in the next four weeks and have extended our completion deadline to six months.
“Our existing lifetime mortgage customers will not be affected by this decision and we will continue to honour the existing terms and conditions and deliver the high level of service that they have become used to.
“Stonehaven remains committed to this market and hopes to return when the funding market improves.”
Bridgewater Equity Release head of sales and distribution Peter Welch says: “Stonehaven’s decision to suspend all new lending is not surprising given the growing funding challenges lifetime mortgage providers are currently facing.
“Over the course of the past year we have seen a number of providers leave the lifetime mortgage sector because of the difficulty in securing the necessary finance to continue lending.
“The open-ended nature of this announcement shows that sources of lifetime mortgage funding are currently at a premium and it is therefore difficult to put a timescale on when these lines will be open again. ”
Welch says that funding problems for lenders are more acute in the lifetime mortgage product arena than in home reversions and insists Bridgewater has a strong funding line.