Could Equity Release be the key to raising a deposit for first time buyers?
The second half of 2020 saw a 19% increase in the number of Equity Release products sold over the first half of the year, according to the Equity Release Council*.
These figures show the robust nature of equity release, and demonstrate that more and more people are looking to money locked up in their property to provide some financial relief and support.
Equity Release can be useful for an array of needs, such as:
- Paying off an existing mortgage
- Booking a holiday of a lifetime
- Paying for care at home
Gifting in particular has risen in popularity, with many looking to provide a ‘living inheritance’ to their children, grandchildren and other beneficiaries. The current stamp duty relief has led to a surge in property purchasers, but where are they getting their deposits? Many may have utilised their reduced spending opportunities to put money aside in savings, but others may be struggling to source the funds needed to secure their home.
The ‘Bank of Mum and Dad’ (BOMAD) or ‘Bank of Grandma and Grandad’ (BOGAG) is often referred to as a useful solution in securing house deposits, where relatives over 55 are able to release funds from their homes and gift them to children or grandchildren. Equity Release only becomes repayable upon death or admission to residential care.
If you’re over 55 and looking to help raise funds for a loved one’s property purchase, or a first time property purchaser looking at your deposit raising options, get in touch to see if Equity Release could be the option for you.
Equity release is a lifetime mortgage. To understand the features and risks, please ask for a personalised illustration. Check that this mortgage will meet your needs if you want to move or sell your home or you want your family to inherit it. If you are in any doubt, seek independent advice.