Equity release used to help graduates saddled with growing university debt
It is no secret that parents and grandparents are using equity release to help younger relatives get on to the property ladder. However following the recent hikes in university fees, some older homeowners are now releasing equity from their property to assist grandchildren with the rising cost of higher education.
Escalating university fees have certainly had a significant impact on the number of young people going on to higher education; according to UCAS 54,000 fewer undergraduates started university last autumn than the year before.
Annual university fees can now cost up to £9000. This means a standard three-year course could saddle a graduate with debts of £27,000 while a 5-year medical degree or 7-year architecture qualification would result in charges of up to £45,000 or £63,000.
It is therefore not surprising that some grandparents are turning to equity release to help minimise the amount of debt now faced by students.
2012 was the second consecutive increase for the equity release market. A total of £961.41 million was released by with homeowners each, on average, releasing £52,268.
Whilst home improvements remain the most common reason for equity release, 31 per cent of funds are being used to help and treat family and friends, up from 25 per cent than the year before, giving further credence to its contribution to university fees.
Content correct at time of publication