Over-55s cash in on property assets to get youngsters onto property ladder

 

Homeownership is still a key concern for many young people, and even getting onto the next rung of the housing ladder sometimes means asking for help.

According to statistics released last week from Key, the equity release provider, retirees aged 55 and over are prepared to dip into their property portfolios and assets to give their offspring a chance to enter into homeownership.

The study assessed 150 mortgage advisers, and around a fifth (19%) recorded receiving an increase in the volume of enquiries from clients aged 55 and over about selling second homes and investment property.

Parents and grandparents using savings and pensions

At present, parents and grandparents give as much as 95% of savings and 21% from their pension funds to younger people to help them to enter the housing market for the first time.

Almost one third (32%) have been asked about acting as guarantors to enable their children or grandchildren to become first-time buyers. That figure is over 28% for those who are considering remortgaging and 21% feel significant pressure to take out a new mortgage loan to allow their offspring to buy.

Data confirms that only a third of young people manage to raise a deposit through their own independent means, while mortgage brokers calculate that about half (47%) of first-time buyers receive some contribution towards their deposit by or parents or grandparents.

Second steppers are also not shy of approaching the bank of parents and grandparents as nearly a quarter (24%) of those moving to their second home are receiving financial boosts from family.

In London, UK Finance data shows the average age is 32 for a first-time buyer earning £68,000 per household.   Nationally the average age is 30 with an LTV of 85% and a loan of £145,000, meaning first-time buyers need an average deposit of around £25,600.

First-time buyers set to keep brokers busy

Levels of mortgage business are looking likely to increase as brokers anticipate a confident flurry of first-time buyer enquiries in the final quarter of 2019.

Will Hale, chief executive at Key, said: “With advisers foreseeing a surge in first-time buyer enquiries, it’s clear that the property wealth of over-55s is increasingly playing an important role in tackling the intergenerational imbalance of property ownership.

“It is really no surprise, given the fact that the average first-time buyer who wants to secure a good rate as they get onto the property ladder needs to find just over £25,000 for a deposit.”

“There is a real possibility for this generosity to have a sting in its tail, with the older generation often using their savings and pensions to help raise the deposit. It is vitally important to ensure that they make decisions which will benefit themselves and their families over the long term and important to seek specialist advice which considers all options, including equity release.”

Highgrove Mews

High Net Yield Freehold Houses

  • Commutable to London (27 mins to central Paddington station)
  • Rental demand extremely strong with large industry presence in Reading
  • Freehold with 4% net yield

£284,955 - £457,000

St Petersgate – Stockport Manchester

New Launch - Stockport Manchester, apartments from £160,000

  • Discounted launch prices from £160,000
  • Excellent transport links with 3 trains per hour to London Euston and only 9 mins journey to Manchester Piccadilly
  • Experienced development team

Assured Rent Housing Association Leases

Assured Rent Housing Association Leases

  • Assured rent & no rental voids
  • Tenant damage cover & newly refurbished inline with requirements of a corporate sitting tenant
  • Free property and lettings management

From £62,000

Emerging Birmingham Commuter Town With Properties From Just £104,000

The emerging Birmingham commuter town where properties are selling in an average of just 24 days

  • A collection of 62 two bedroom apartments and 28 one bedroom apartments.
  • DE14 is one of the fastest selling postcodes in the West Midlands.
  • 23 minute train journey into Birmingham New Street Station.

Properties from £104,000

Mill, Stockport

The Northwest's emerging property hotspot

  • Discounted off-plan 2-bed prices from £162,000
  • Completion date - Q4 2021
  • Rental yields - 6% plus

Discounted off-plan 2-bed prices from £162,000

South Central – Birmingham City Centre Apartments

Highly anticipated 28 storey launch in Birmingham City Centre with an impressive roof garden and communal facilities.

  • 154 units across 28 storeys
  • Residential multi-media community room, gym, roof garden and sky cinema
  • Excellent future connectivity via the metro system to other key transport hubs and locations around the city

from £205,800

ba-

Talk to us

Speak to our UK property experts today: 

+44 (0) 333 123 0320

Open from 9am-6pm GMT

+852 9865 4446

Open from 9am-6pm HKT

Stamp Duty Calculator

.

Unlock members only investment opportunities and full development details. Join now – it’s free, quick and easy.

Login

Not a member? Sign up for free

property investment value

Over-55s cash in on property assets to get youngsters onto property ladder

Example

By submitting your details via this online form you agree to be contacted via email/phone/SMS by Direct Marketplace Ltd t/a BuyAssociation in relation to property investment and property developments . We do not share your personal details with third parties.  To view our full Privacy Policy click here.