Recent research has revealed that every week, up to 18 first time buyers are being helped onto the property ladder through the use of equity release loans.
According to Retirement Advantage, 2.6% of those who took out equity release plans last year did so to help a relative purchase their first home. This equates to around one in 40 of the 36,825 plans taken out in 2017.
Whilst last year saw total equity release surpass the £3 billion mark, it’s estimated the that funds intended for those hoping to buy their first home reached £79 million.
Commenting on the research was Alice Watson. The head of product and marketing at Retirement Advantage stated: “With the growth in equity release in recent years, we’ve seen people are not only using equity release to help support them in retirement or clear outstanding debt, but increasingly also to pass on an early inheritance to help their relatives onto the property ladder. With higher house prices making home ownership a greater challenge for this generation of first-time buyers, it is little surprise that more relatives are passing on the benefits they’ve received from having greater equity to the next generation.
“It also pays testament to the fact that many are increasingly at ease with viewing their assets holistically and tapping into their property wealth, so they can see it enjoyed by their relatives during their lifetimes. If house prices continue to rise and more people view using property wealth in this way as a norm, equity release could become a significant route to home ownership in the coming years.”
