HAVING spent years paying off their own mortgages parents are now increasingly releasing equity on their homes in order to give their children a chance to get on the property ladder.
Equity release specialists Retirement Advantage have estimated that in the first half of 2016, 32 first-time buyers were helped on to the housing ladder every week as a result of an equity release product.
The figures reveal the extent to which older family members are using equity release to gift to younger relatives in this particular way.
The company’s own figures reveal that in the first half of 2016, 7% of their customers said they were purchasing an equity release product so that they could help a first-time buyer.
Over the same period, statistics from the Equity Release Council show that there were 11,846 new equity release customers nationwide.
Alice Watson, product and communications manager at Retirement Advantage Equity Release, said: “In recent months and years the reasons for buying equity release have diversified with real fervour.
“Perhaps the most striking development we’ve seen so far this year is the proportion of customers telling us they want to unlock some of the wealth in their property to help a family member get on to the housing ladder.
“If you apply this trend across the country, it is no exaggeration to say that equity release is making a significant impact on the ability of first-time buyers to own a property.”
Ms Watson said that this latest reason for equity release was yet more evidence that property wealth is now seen as a viable and flexible resource in retirement, alongside pensions and other pots of savings.
She added: “The customers we deal with want to do something special like go on the holiday of a life time, help a grandchild buy a home, or simply have a bit more cash available to live more comfortably in retirement.
“They recognise that equity release can be the ideal vehicle to help them achieve this.”