Legal & General said its lifetime and retirement interest-only mortgage advances slumped 26% to £104m in the first half of the year, “as the market remains subdued as a result of higher interest rates”.  

The financial services firm added that its UK lifetime mortgage book came in at £6.1bn in the first six months of the year compared to 12 months ago, accounting for 7% of the group’s £84.6bn portfolio of assets, which includes traded credit products and direct investments. 

Its institutional retirement operating profit lifted 11% to £618m from a year ago, underpinned by back book earnings that included £150m of profit across its annuity portfolio, the group said in a financial statement. 

The Bank of England is expected to drop the base rate by a quarter point from its 4.25% level tomorrow, which would be the third cut this year. 

Markets expect one further rate reduction from the central bank in 2025. 

The financial services group sold UK housebuilder Cala Homes for £1.4bn to Ferguson Bidco Limited, a vehicle owned by investment funds Sixth Street Partners and Patron Capital, last September. 

L&G said the move was part of its new strategy to sell non-strategic businesses, adding that the Cala disposal “reduced shareholders’ exposure to UK housebuilder volatility, while releasing both proceeds and management’s time for reinvestment into our core propositions”. 

The group said its overall core operating profit rose 6% to £859m in the period, buoyed in part by a string of recent UK pension risk transfers acquisitions. 

Legal and General chief executive António Simões said: “We are growing and making the most of the synergies between our three businesses. 

“Institutional retirement operating profit is up double digits, and we have written over £5bn of new business at low capital strain.”