Parents are turning to lifetime mortgages to help their children buy a home, as property prices remain high and the cost-of-living crisis bites.
Almost 2 million (1,868,821) parents over 50 either have, or would consider, taking out equity release to help their children get on the property ladder, according to research conducted on behalf of financial services mutual, OneFamily.
The survey of 2,000 over 50s suggests the average amount of money people either had already, or would be willing to take out on their home for this purpose, was £52,000.
The research, which was conducted by Opinium on behalf of OneFamily, comes at a time where many are concerned about high costs of rent and essentials such as food and bills, and how this affects their children.
Of those with children who rent, 41% said the cost-of-living crisis means their kids can’t afford to save a deposit for a mortgage. Meanwhile, 24% think renting is ‘money down the drain’ and 20% worry their child won’t be able to meet their daily living expenses due to high rent costs.
Out of the 2,000 people surveyed, 93% owned their own home, either outright or with a mortgage. Of those who have children, nearly two thirds (64%) said they either already have, or would consider giving money to help them put down a deposit to purchase a property.
Jackie Davies, head of customer service and direct sales at OneFamily, said: “It’s becoming increasingly difficult for first-time buyers to get their foot on the property ladder, and many parents want to help where they can. With savings in the Bank of Mum and Dad now often depleted by the cost-of-living crisis, parents are turning to equity release to help their children.
“Equity release isn’t right for everyone, but in some circumstances, lifetime mortgages can help people free up cash held within a property for a number of purposes, whether that’s home improvements for yourself or gifting to loved ones. It can be used to help family members buy a home of their own, and even allow them to put down a higher deposit to then have lower mortgage rates.
“For those considering equity release, speaking to a specialist adviser such as OneFamily Advice should always be the first step in understanding whether it can be right for them.”