Admittedly, this sounds like the type of question you might expect to find in a journal (or, at the very least, a trade media title). However, as an equity release mortgage specialist and Guildford mortgage broker, we believe that the answer is ‘yes’ – and here’s why.
For a whole host of reasons, many of which are generational (and not all of which can be blamed on the current global situation), young people are finding it increasingly tough to get a first time buyer mortgage.
This might be related to a reduction in available first time buyer mortgage deals. Or, it might be simple economics, whereby demand has pushed up the price of property, thus decreasing the ‘real’ value of a deposit that someone may have taken years to save and leaving homeownership out of reach. Regardless of the cause, it’s really not that easy for the next generation of homeowners.
And this is where equity release mortgage deals are making a big difference.
See, many of those aged 55 and over (the pre-requisite for equity release) are at the opposite end of the spectrum. They made money – sometimes a lot of money – on their property. More often than not, it was by pure luck and in no way the result of any shrewd business decisions. Property simply went up, and up and up.
But now, as they find themselves either financially secure or in the latter stages of their life, equity release – the process of freeing up wealth currently tied up in bricks and mortar – is becoming a way in which to help their children, and even grandchildren, get that foot on the property ladder.
We’re all aware of the term ‘bank of mum and dad’, but now the ‘bank of grandma and granddad’ is also becoming more commonplace, too.
Age Partnership has reported an increase in equity release as a way in which for those of a certain age to provide their loved ones with early inheritance gifts. Maybe last year’s equity release boom was to help family members buy a property before the stamp duty holiday ends this spring. Either way, it seems as though equity release mortgages are becoming a balancer – a way for the older generation to move wealth down a generation or two in order to give younger family members the same opportunities they once had.
In any case, equity release mortgages are becoming more popular. Given the struggles the youth of today face, it’s not hard to see why.
Are you 55 and over and thinking of applying for an equity release mortgage? If so, contact the Complete Mortgages team today on 01483 238280 or email firstname.lastname@example.org. Similarly, if you’re the recipient of an equity release inheritance gift and are looking to apply for a first time buyer mortgage, get in touch.
By Mark Finnegan, Equity Release Adviser at Complete Mortgages