A helping hand for First Time Buyers?

Published: 22/06/2011

Only 5 per cent of 20 – 45 year old non-homeowners are making the necessary sacrifices to save for a deposit while the majority “have no spare cash, no interest or were trying to save but failed to do so”¹. Two thirds of the group have given up hope of owning their own home¹.

The average age of a first time buyer is now 38², thanks to strict lending criteria, the size of mortgage deposits and a general fear of the application process¹.

The bank of mum and dad

The average deposit required for the average price property was £27,644 in Q4 2010³, a figure that even the bank of mum and dad may struggle to finance, and while there has been a mild increase in the number of 95 per cent loan-to-value mortgages appearing on the market, analysis would appear they are little more than window dressing.

So it is no surprise that the older generation are beginning to turn to equity release plans in increasing numbers to help their children and grandchildren get a firm foot on the property ladder.

Andrea Rozario, Director General of Safe Home Income Plans (SHIP) explains the benefits:

“For a lot of people equity release can act as a form of pre-inheritance, an opportunity to pass on their wealth to their families whilst still able to see the benefit it brings. It is important than any and all decisions are taken together as a family and by talking to a financial adviser.”4

As well as talking to a financial advisor, it is essential for those contemplating an Equity Release plan, for whatever reason, to take legal advice too in order to ensure all the legal nature, effects and implications are fully explained and understood.

Goldsmith Williams Solicitors specialise in exactly this service. We are a founding member of Equity Release Solicitors’ Alliance (ERSA) and can recommend a panel of specialist Equity Release advisors. Call our dedicated GWLifetime team on 0845 373 3737.

Sources
¹Mortgage Strategy (May 2011)
²Today’s Conveyancer (May 2011)
³Mortgage Strategy (June 2011)
4Age Partnership (April 2011)

Content correct at time of publication