Home owners in Britain taking out equity release on their property helped 46 first time buyers a week onto the housing ladder in 2018, new research shows.
An analysis by Canada Life Home Finance estimates that 2.9% of the 82,791 equity release customers in 2018 used the money to help first time buyers secure a home, up from 2.6% in 2017.
But home improvements remained the most popular reason to take out equity release with 48% of customers doing so and using the money to undertake work on their property or garden.
‘The equity release market continues to grow, as more people approaching or in retirement become open to the benefits these products can offer them and their families. Rising property prices can cause older homeowners to worry about how their loved ones will get onto the housing ladder,’ said Alice Watson, head of marketing and communications at Canada Life Home Finance.
‘Many are increasingly aware of the intergenerational benefits of unlocking their own property wealth to help the younger generation secure their first home. The younger generation can also benefit from the fact that equity release is often used to enhance people’s existing properties’ she pointed out.
‘Although this is a less direct means of support, home improvements increase the value of the property, meaning there is likely to be a larger pot of money available in future that could be drawn on to provide a much needed deposit or a living inheritance,’ she added.
