New research from Hodge has found that almost two-thirds of people who are receiving financial support from their families, are receiving their funds from the equity of that relative’s home.
A recent study looking at how families are working together to purchase property, pay off debts and meet rising living costs, found that 61% of people aged under 50 had done so with the help of relatives releasing funds against the value of their own property.
A quarter of those who had received financial support in this way used the funds to go and purchase a property of their own.
In its latest study, Hodge questioned 1,240 people aged between 16 and 80+, and found that the vast majority (84%) of people aged under 50 claim to need financial support from family to help them with the cost of living generally.
In response, more than half of those aged over 50 (57%) said the cost of living has also affected their ability to lend money to others in return.
Emma Graham (pictured), business development director for mortgages at Hodge, said: “What these figures show us is that families are moving into a different era financially, and starting to focus much more heavily on pooling their monetary resources.
“There is a progression now, it would seem, towards meeting the challenges presented by the cost of living crisis as a united family unit, and looking at what can be drawn down from assets the previous generation has amassed in order to support their children or grandchildren now, as opposed to focusing on what could be set to get passed on.”
As a market leader in complex and later life lending, Hodge itself has made a series of significant enhancements to its later life mortgage products to support older borrowers facing affordability issues in recent months.
Alongside a number of affordability related criteria enhancements to new purchase and remortgage applications, the specialist lender also announced a reduction across both its 50+ and RIO mortgage range of products last month too.
“What these figures show us clearly, is that the need to remain flexible and support borrowers at all stages of their life for the benefit of family members looking to get on themselves is more crucial than ever.
“Our focus here at Hodge has always been to flex and respond to market pressures in a way that allows us to continue supporting our brokers and their customers in the moments that matter, and we’re working harder than ever in light of this research to make sure that continues.”