Equity release can enable homeowners to financially help children
Gifting money to younger family members is one of the top reasons older people give for their interest in using equity release, according to the Equity Release Council.
In its recent report Home advantage: Intergenerational perspectives on property wealth in later life the trade body noted the increasing trend of parental support in the mortgage market.
The report said that nearly half (46%) of homeowners in their thirties have relied on financial help from family or friends in recent years.
It stated ‘with many not expecting to receive an inheritance until their mid 40s to 60s, the option of gifting a living legacy by accessing property wealth through equity release or a later life mortgage looks set to grow in importance’.
Will Hale, CEO at Key, said: “The ‘Home Advantage’ report from the Equity Release Council not only recognises how far the industry has come over the last 30 years in terms of product safeguards and innovation but also the thousands of lives it has positively influenced – helping older homeowners enjoy more secure retirements and facilitating the opportunity for many to help their loved ones.
“According to Key’s H1 2021 Market Monitor, 25% of those who released equity from their home in 2021 did so to gift to friends or family.
“Far from being a selfish choice to access property wealth via lifetime mortgages, retirement interest-only products or downsizing, the ability to gift to the next generation at the point they need it most can be priceless. Equity release can be the enabler that allows children and grandchildren to view homeownership as a realistic ambition rather than an unattainable dream and could potentially save them over £300K across 30 years.”