Stonehaven suspends equity release lending

Stonehaven has become the latest provider to temporarily withdraw from the equity release market.

The lender said all new lending was “suspended temporarily” but it would continue to honour applications received until April 7. Existing customers are not affected by the decision.

The move by Stonehaven follows the withdrawal from the market of a large number of equity release lenders over recent months, including Northern Rock, Saffron Building Society, Coventry Building Society and Retirement Plus.

Last November, Prudential - one of the top three equity release providers - surprised the market by announcing it would stop selling lifetime mortgages - a type of equity release product - from the first quarter of 2010.

Equity-release plans enable asset rich, but cash poor, borrowers aged 55 and over to unlock cash from a family home without having to sell up and move out.

Georgina Smith, sales and marketing director at Stonehaven, said it was forced to suspend lending after the firm’s funder, banking giant Santander, decided it no longer wanted to fund lifetime mortgages.

“We are in discussion with a number of potential lenders and we do hope to start lending again in the near future. We believe in equity release as a product,” she added.