If you have children or grandchildren then you’ll probably be well aware how hard it’s been for first time buyers to get on the property ladder since the financial downturn in 2007. It’s now been revealed that as a result, over the last five years parents have stumped up more than £1.31billion in deposits for over 228,000 first time buyers*, and it’s putting a strain on many families.
Typically, 30 per cent of first time buyers have financial help from their parents, with the average set of parents loaning or gifting almost £13,000 to members of their family. As well as contributing (or even completely covering) deposits to purchase homes, parents are giving the money to help their children pay off debts and fund day-to-day living.
With the average first time buyer putting down a deposit of £27,000 to secure their home, it is unsurprising that people are turning to their elders for help. It leaves thousands of parents and grandparents consequently delaying retirement, using their savings or even having to remortgage their homes to help their younger generations out financially.
Many, that are perhaps concerned about the financial pressures on their own finances but are keen to help their children buy their first house or move up the property ladder, are turning to equity release. By releasing a cash lump sum from their property, they are able to give their children and grandchildren their inheritance early with the money being used for anything from purchasing a house to helping with the cost of a new baby in the family.
Have you helped your children or grandchildren get on the property ladder?