Millions of Parents Eye Equity Release to Aid First-Time Buyers

Approximately 1.8 million parents across the UK are considering a significant step to help their children climb onto the property ladder: equity release. This move, seen as a beacon of hope for many aspiring homeowners, represents a growing trend among parents to financially assist their children in securing their first home.

Survey Sheds Light on Parental Support

A recent survey conducted by OneFamily, which gathered insights from over 2,000 individuals, reveals an eye-opening willingness among parents to delve into their property’s value for their children’s benefit. It’s not just a few quid we’re talking about here; the average amount these parents are prepared to release from their homes stands at a substantial £52,000.

Homeownership and the Giving Trend

The survey highlights that 93% of respondents are homeowners, either owning their property outright or having a mortgage. Significantly, 64% of these parents with children are open to, or have already, given financial support for a property deposit. This act of generosity isn’t just a nice gesture; it’s a crucial lifeline for many young adults struggling in today’s market.

The Driving Factors

Why this sudden surge in parental aid? Well, the reasons are as practical as they are heartfelt. About 41% of parents acknowledge that the soaring cost of living is a massive hurdle for their kids in saving for a deposit. Almost a quarter view renting as throwing money away, and worryingly, 20% fear their children can’t cover daily living expenses due to high rental costs.

Is Equity Release A Viable Solution?

Jackie Davies, the head of customer service and direct sales at OneFamily, sheds light on this situation. She notes the increasing difficulty for first-time buyers to step onto the property rung and recognizes parents’ eagerness to lend a hand. However, with many parents feeling the pinch of the cost-of-living crisis, traditional savings are often not enough. This is where equity release comes into play.

Understanding Equity Release

Equity release, particularly lifetime mortgages, can unlock the cash tied up in a property. This method isn’t a one-size-fits-all solution, but it’s increasingly seen as a practical option for many. It’s not just about helping children buy homes; it can also allow for significant home improvements.

The Bigger Picture

Jackie Davies highlights the dual benefit of equity release. It helps family members secure a home and potentially allows for larger deposits, leading to more favorable mortgage rates. However, she cautions that this route isn’t suitable for everyone. Seeking advice from specialists, like OneFamily Advice, is crucial to understand if equity release is the right choice for you.

Final Thoughts

The trend of parents considering equity release to assist their children in buying a home reflects the shifting dynamics of the property market and family financial planning. It’s a decision that requires careful consideration and expert advice, but for many, it represents a valuable opportunity to support the next generation in achieving their homeownership dreams.