More data from CML on lifetime mortgages
The amount of fresh equity release
loans to older home-owners (lifetime mortgages) rose, however
the value of lending dropped in 2006, this data was put forward
by CML. This alters the size of the average new loan from 45 thousand
pounds around 2005 to 41 thousand pounds in 2006.
Many people applied for smaller loans
as the year passed by. Towards the end of the year, the new average
loan was 38 thousand 400 pounds – These figures are the
lowest since CML started investigating 2002 period.
In 2006 new lifetime mortgages lending
rounded at 971 million pounds, however last year was 1,048 million
pounds. In 2005 new loans rose from 23,215 to 23,786, 2006.
Smaller loans have always been more
popular, the complete total value of lifetime mortgages adds up
to over 6 billion pounds, towards the end of 2006 at a stunning
6.6 billion and in 2005 this figure was just 5.3 billion.
Looking at different aspects, Jackie
Bennet, CML head said:
"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. The move towards greater use of flexible features that
allow people to draw down money as they need it, rather than all
upfront, will also have helped the trend.
"This is all good news for
older people looking to release equity from their homes. Specialist
advisers on lifetime mortgages are clearly beginning to adopt
good practice. The FSA's good practice advice further emphasises
the special nature of this market. We expect confidence in the
market to grow further, now that the FSA is also regulating home
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