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Council of Mortgage Lenders: Careful lenders dole out smaller lifetime mortgages

05 February 2007
The number of new lifetime mortgages rose to 23,786 in 2006 from 23,215 in 2005 while the size of the average loan dropped from around £45,000 to £41,000, new figures from the Council of Mortgage Lenders (CML) show.

The size of the average loan fell continuously throughout the year, reaching £38,400 by December, the lowest level since 2002.

"The trend towards smaller loan amounts on lifetime mortgages suggests that lenders and intermediaries are being careful to ensure that people are only borrowing what they need," CML head of policy Jackie Bennett commented.

This restrained lender behaviour should help build confidence as FSA regulations on the market sector are also tightened up, Ms Bennett stressed.

"Specialist advisers on lifetime mortgages are clearly beginning to adopt good practice," she said.

The trend towards sensible lending and borrowing levels has been stimulated by background concerns about the level of debt among Britain's older population.

Earlier this week, a survey from Which? Money found that one in three older people were concerned that they would not have enough money to enjoy a comfortable retirement.

For more information about lifetime mortgages, click here.

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