Total value of properties bought with family assistance predicted to reach £124.6 billion in dire market for first-time buyers
Total value of properties bought with family assistance predicted to reach £124.6 billion in dire market for first-time buyers.
First-time buyers are deserting the UK housing market after a surge in mortgage rates which has stunted many from getting a foot on the ladder, according to a report from UK Finance.
The number of loans for first-time buyers dropped by 28% in Q2 compared to last year – the lowest figures seen in a decade – as economic turmoil and affordability issues continue to permeate household budgets across the nation.
As rising house prices remain out of reach of a majority of Britain’s younger generation, a separate report reveals that the “Bank of Mum and Dad” is rapidly evolving into the “Bank of Family”, with almost half (47%) of property purchases this year involving financial support from relatives.
As younger generations increasingly turn to relatives to help them secure a deposit on a house amidst a record living squeeze, Rudy Khaitan, Managing Partner at Senior Capital – the UK’s leading later-life lending specialist – discusses the rise of equity release as a vehicle to help older homeowners access wealth currently locked up in their home.
As well as using this capital to enhance their quality of life – and retirement – pensioners have also been able to use this to help their family members step on the housing ladder amidst a period when the average two-year fixed mortgage rate has topped 6%.
Figures from Senior Capital highlight the growing necessity of relying on the older ‘asset rich’ generation to help prospective homebuyers get on the property ladder, with over 1-in-5 (23%) Brits admitting they’ve lent more money to their family in the last two years than at any other point in their lifetime.
An additional 45% of British parents admit they believe their children’s financial situation is significantly worse than theirs was, while 64% of retirees stated that one of their biggest stresses is currently the impact of the living squeeze on their savings and pensions.
Rudy Khaitan, Managing Partner of Senior Capital, comments:
“Equity release is more than a financial tool; it’s a lifeline for pensioners who find themselves caught in the grip of a cost of living crisis.
“It’s about giving them the freedom to unlock the wealth they’ve built up in their homes, and providing them with the means to live with dignity and security in their golden years.
“In a world where the costs of everyday essentials are soaring and traditional forms of retirement income can’t keep up, equity release can be a vital support, ensuring that the senior members of our society can enjoy the quality of life they’ve worked so hard to achieve.
“This particular financial product is not just a tool for pensioners to enhance their own lives, it’s also a way to transfer wealth to the next generation.
“By unlocking the value tied up in their homes, parents and grandparents can provide their family members with life changing capital that could fast track their path onto the property ladder, or as seed capital for them to pursue their professional or entrepreneurial aspirations.
“Equity release is about more than immediate financial relief, it provides a means to shape a brighter future for families across the UK, helping them achieve their dreams of ultimate financial stability.”
Kindly shared by Senior Capital
