The amount of older home owners that have benefited from considerable increases in the value of their homes, are also using this equity to help their younger relatives become first-time buyers.
In fact, when the figures, obtained by Canada Life, are compared with 2017, they indicate that 0.3% more equity release customers are using the money locked in their home to finance the housing deposits for younger relatives.
The figures also suggest that at least 46 first-time buyers per week are helped by the bank of mum and dad that use equity tied up in their home.
2.9% of the 82,791 equity release customers used the money to help fund a home purchase. This figure has increased from 2.6% in 2017.
Alice Watson, Head of Marketing and Communications at Canada Life Home Finance, said: “The equity release market continues to grow, as more people approaching or in retirement become open to the benefits these products can offer them and their families. Rising property prices can cause older homeowners to worry about how their loved ones will get onto the housing ladder. Many are increasingly aware of the intergenerational benefits of unlocking their own property wealth to help the younger generation secure their first home.”
“As always, it is important that people consult a professional financial adviser before using equity release in this way, as it won’t be suitable for everyone and may affect their tax position.
“The younger generation can also benefit from the fact that equity release is often used to enhance people’s existing properties. Though this is a less direct means of support, home improvements increase the value of the property, meaning there is likely to be a larger pot of money available in future that could be drawn on to provide a much-needed deposit or a living inheritance.”
How important is the bank of mum and dad to conveyancers and the housing market?
