The trade body’s data showed the number of equity release policies taken out increased by 2 per cent over the first six months of the year from 10,877 to 11,130.
However, in the same period, there was a 7 per cent decline in the value of new business, dropping from £493 million to £460 million.
Laurence Baxter, senior policy adviser at the CML, said: “The data paints an encouraging picture of the equity release market. More people are taking out equity release mortgages, showing that slowly but surely, the market is continuing to grow and it is our belief that the market has the potential to continue to grow over the coming years.”
According to the trade body, there is now £5.8 billion-worth of equity release lending, with 113,678 policies currently outstanding.
The Financial Services Authority’s (FSA) recent review of the lifetime sector showed there had been improvements in the quality of service provided and Baxter believed this would help improve confidence among consumers.
He added: “Consumer confidence will continue to improve if the good practices of providers and intermediaries become more widespread across the market.”
Ged Hosty, director at In Retirement Services, said the industry was starting to move forward. “Looking at the figures, the underlying trend of sales is positive and I think the value of business being down reflects the switch to drawdown policies. While the initial value of these is lower, as people take out more money the value goes up, so therefore the market isn’t moving back in this respect.
“I would agree last year’s FSA mystery shop caused the equity release market to freeze up and only now are we seeing the lifetime market start to move forward. The practices the regulator recommended are now being adopted and we are moving forward as an industry.”
