Could eq­uity re­lease help ‘bank of mum and dad’?

Rutherglen Reformer - - Election Special -

Ac­cord­ing to new re­search by Le­gal & Gen­eral, friends and fam­ily are ex­pected to lend more than £6.5bil­lion in 2017 to young homebuyers, up from £5bil­lion last year.

The money is help­ing to pro­vide de­posits for more than 298,000 mort­gages to help buy homes worth £75bil­lion and means the bank of mum and dad is on a par with the UK’s ninth big­gest money­len­der.

Le­gal & Gen­eral chief ex­ec­u­tive Nigel Wil­son said: “The bank of mum and dad con­tin­ues to grow in im­por­tance in help­ing young peo­ple take early steps on to the hous­ing lad­der.”

The news will come as no sur­prise to those who have dipped into their hard-earned sav­ings to help out their chil­dren or grand­chil­dren buy their first home.

Many re­tired peo­ple feel sorry for young­sters in their fam­ily who are faced with find­ing crip­plingly high de­posits for sky-high property prices. But in­stead of emp­ty­ing your nest egg and leav­ing your­self cash-poor, there’s a pain­less way to help the kids buy their first home – eq­uity re­lease.

With property prices rising by four per cent in Scot­land and record low in­ter­est rates now avail­able for eq­uity re­lease plans, there has never been a bet­ter time for homeowners to make the most of their property wealth.

And, ac­cord­ing to new anal­y­sis from lead­ing over-55s fi­nance spe­cial­ists Key Re­tire­ment, eq­uity re­lease plans have boosted Scot­tish property own­ers’ re­tire­ment fi­nances by more than £86 mil­lion in the last year.

Eq­uity re­lease is avail­able to those aged be­tween 55 and 95 who own a property worth at least £70,000.

It al­lows a tax-free cash lump sum to be taken from the value of their property.

With eq­uity re­lease pro­vid­ing homeowners with the op­tion to un­lock the wealth built up in their property, 21 per cent de­cide to use the money to pro­vide fi­nan­cial help to their fam­ily.

So, if you want to help some­one in your fam­ily get a foot on to the property lad­der, there’s no need to sac­ri­fice your re­tire­ment dreams of ex­otic travel or mak­ing home im­prove­ments in order to pro­vide fi­nan­cial sup­port.

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