Equity release being used to fund first time buyers
19 March 2019
Equity release was used to fund 46 first-time buyers a week in 2018, according to analysis by Canada Life Home Finance.
The company estimated that one in 34 (2.9%) of the 82,791 equity release customers in 2018 used the cash to help first-time buyers get on to the housing ladder. This was slightly up on the 2.6% reported in 2017.
Commenting on the figures, Alice Watson, head of marketing and communications, Canada Life Home Finance, said: “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. Many are increasingly aware of the intergenerational benefits of unlocking their own property wealth to help the younger generation secure their first home.”
Canada Life’s data also revealed that home improvements topped the reasons why people took out equity release in 2018, with almost half (48%) of customers putting the money towards enhancing their home and garden.
Watson added: “The younger generation can also benefit from the fact that equity release is often used to enhance people’s existing properties. Though 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.”
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