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Mortgage loans on the up

7 February 2005

There are currently 25 times more lifetime mortgages than there were ten years ago, but this is just the tip of the iceberg, the Council of Mortgage Lenders has said.

In the second half of 2004 more than 15,000 lifetime mortgages, with a value of £693 million, were advanced brining the total number of outstanding lifetime mortgages to over 83,300 and their total value to just under £4 billion.

But the housing equity held by the UK's over-65 population is worth around £1.1 billion, the Institute of Actuaries found recently, and the Council of Mortgage Lenders believes that this will be increasingly tapped into.

So far the market has been constrained by caution on the part of both consumers and lenders, the council said.

But research last year suggested that people currently in their 40s and 50s are much more likely to tap into their housing equity in old age than those currently aged 65 or over.

Jackie Bennett, CML senior policy adviser, said: "Equity release lending grew by ten per cent in 2004. This followed an exceptional 70 per cent growth rate in 2003.

"However, with such a huge pool of untapped housing wealth among older home-owners, many of whom may be disappointed with their pension provision, it is clear that there is a potentially huge market for responsible lifetime mortgage lending.

"With the comfort of mortgage regulation, both lenders and consumers may now have the reassurance they need to consider making more use of equity release."