Older homeowners typically gift £42.5k to young buyers
Older homeowners gifted an average of £42,500 to younger relatives to help them get on or move up the property ladder in 2020, research from Key shows.
Those in London (£102,826), the South East (£61,500) and Wales (£44,200) gifted the most, with people in the North West (£23,467) and Yorkshire (£25,217) giving the least.
The average first-time buyer deposit is £57,278.
Will Hale, chief executive at Key, said: “Finding almost £60,000 to use as a deposit for your first home is tough – especially in the current economic environment – and therefore it’s not surprising that many younger people have looked to take advantage of the stamp duty holiday.
“In 2020, older homeowners released almost £755 million of equity in order to help younger members of their family meet a range of costs including supporting them with an average of £42,500 to use for a house deposit.
“For many people, these gifts will have been the enabler to them buying their first home and is a perfect example of how intergenerational wealth transfer can deliver positive societal benefits. The stamp duty holiday has certainly been a catalyst for more activity in this area but helping family is always a major motivation for older homeowners exploring their equity release options.
“That said, it is vitally important that homeowners get specialist advice if they do decide to use some of the value tied up in their home to help their families. Balancing generosity with their own financial security is vital and a good adviser will help them explore all their options.”
In Wales, the East Midlands, Northern Ireland and the North East the typical gift was higher than the average needed by a first-time buyer.