How Can I Buy A House?
Published: 19/07/2018
The generation that historically should be buying properties right now, or even already own one, are being labelled the ‘boomerang generation’.
Why? They are moving back in with mum and dad! Latest reports indicate that many over-55s are seeing their adult children return to the family home, for a number of reasons, including divorce, unemployment or debt. Others want to return to education or take up unpaid or lowly paid internships, so decide that a rent-free life is better suited to them (and their bank balance).
These grown-up sons and daughters are coming right back to where they started, just like a boomerang does!
As a result, retired couples are finding themselves with a rather full house again (and a lot less freedom than they expected at this stage of their lives).
One way that older individuals are helping their adult children sort out their finances is through equity release - or a ‘lifetime mortgage’, as it is often referred to.
According to research by Saga last year, single first-time buyers now need to save for an average of 13 years to have enough for a deposit, compared with just a year’s worth of savings in the 1990s.
About 60 per cent of first-time buyers get help from parents to buy their first home.
Similarly, research by Key Retirement in 2016 found that almost 25% of their equity release clients released funds from their property to help out family or friends financially.
Getting grown-up children onto the property ladder means retired couples can enjoy retirement with more freedom and peace of mind. Additional cash can be used on things such as paying off debts (a third of Key’s clients have done this), funding home or garden improvements (64%), finally saying goodbye to the mortgage (a fifth) or going on more holidays (29%).
Furthermore, according to Retirement Advantage, 18 first-time buyers are making it onto the housing ladder every week thanks to family members taking out equity release loans. That’s a substantial number!
Of course whether you opt for equity release and how you spend the money is entirely up to the individual property-owner/s, who need to carefully consider their decision beforehand, and enlist expert advice on the matter.
What is equity release?
Equity release allows individuals who are over 55 (and meet some other requirements) to release funds from their property, while remaining in it as owners. It is a type of ‘lifetime mortgage’ and an increasingly popular financial instrument.
Equity release is only repaid either when you pass away or move into long-term care. You won’t have to make any repayments as interest is added to the lump sum that is to be repaid after your death. Alternatively, you would have to pay back the funds if you decided to sell your property.
With ER, you can either borrow against the value of your home or sell all or part of it in exchange for a lump sum or a regular monthly income.
Who can take up equity release?
To qualify for equity release, you must:
- Be aged over 55
- Own your own property worth at least £50,000
- Live in England or Wales
Is equity release right for me?
That depends on your personal circumstances. It is important to fully consider your options and receive independent financial advice before making a decision.
Should I speak to GWlegal about my equity release?
Yes!
The GW team includes several specialised equity release lawyers. In fact, GW is a founding member of the Equity Release Solicitor Alliance (ERSA).
What also sets us apart from other solicitors is that we offer a unique home visit service.
It is compulsory to meet with a solicitor or suitably qualified equity release lawyer at least once during the process of equity release. While most will expect you to come to them, we don’t (and at no extra cost)!
Other ways GWlegal can help first-time property buyers
Check out our special package for FTBs, First Moments. Young buyers will get expert advice, free materials to make the process smoother and even freebies!
Who are GWlegal?
GWlegal are a specialist equity release solicitors based in Liverpool.
If you have a legal matter you wish to discuss don’t hesitate to get in touch. You can call us on 0345 373 3737 or hello@gw.legal with your question.
Who are GWlegal? We’re a national firm with local values.