Many turning to Equity Release to help struggling FTBs
Parents and grandparents are turning to Equity Release to help children and grandchildren raise the large deposit required to buy their first property.
A culmination of hefty deposits, a shortage of properties and strict lending criteria continues to keep the first wrung of the property ladder a step too far for most. It is estimated that the average age of a first time buyer is currently 43¹. Sadly two thirds of 20 – 45 year old non-homeowners no longer believe they will ever be able to own their own house.
The average deposit required for a mortgage is now around 20 per cent of the total property value. With first time buyers typically looking for properties around the £125,000 price mark, many need a deposit close to £25,000.
It is therefore no surprise many have little other option than to turn to the bank of mum and dad or even the building society of grandma and granddad!
Richard Espley is the Head of Equity Release at Goldsmith Williams:
“At a time where many are struggling to meet the rising cost of living, the idea of raising the capital needed to enter the property market is simply impossible.
“Because of this we are seeing an increasing number of parents and grandparents releasing equity from their own home to help loved ones finance their own. Equity release is starting to be considered as a form of pre-inheritance which in the current financial climate makes a lot of sense.”
Content correct at time of publication