More grandparents than parents are helping first-time buyers make their first move on to the housing ladder, independent research shows.
The nationwide study shows more than a third (34%) of estate agents have seen a rise in first-time buyers being helped by grandparents compared with 26% who report an increase in parents helping out children. Around a fifth (21%) of estate agents say first-time buyers are being helped by parents and grandparents.
Mortgage experts are warning the growth rate of first-time buyer numbers will slow this year after hitting record levels in 2016 although the Council of Mortgage Lenders says the number first-time buyers was up 8% in the past year.
Equity release referral service Key Partnerships study shows estate agents share the concern – half (49%) of those questioned say they are worried about the withdrawal of Government schemes to help first-time buyers. The Help to Buy mortgage guarantee scheme funding lenders offering higher loan-to-value loans ended at the start of the year but equity loans and Help to Buy ISAs continue.
Estate agents are increasingly aware of the role of equity release plans in helping grandparents release money to help first-time buyers – 60% of those questioned know it can be used to support first-time buyers and more than half (54%) are interested in finding out more.
Around half of estate agents (49%) believe equity release plans are a solution for first-time buyers and 52% say they would highlight them as a solution if they had a relationship with a specialist adviser.
Will Hale, director at Key Partnerships, said: “The financial pressure on first-time buyers to raise the money for a deposit means grandparents are starting to play a bigger role than parents.
“Grandparents however need to think carefully about how they will fund grandchildren and plan ahead so they are not doing so at a cost to their own financial well-being in retirement. That should include looking at releasing equity from their homes.
“Estate agents are valued as a source of financial guidance and those who can discuss equity release as a potential alternative fund-raising solution will be able to benefit from an additional revenue stream by referring potential clients to a specialist.”
Key Partnerships is increasingly focussing on customers referred by introducers including estate agents and has allocated a number of dedicated Key Retirement advisers experienced in dealing with the complexities of interest-only.
Key Partnerships is a B2B referral service providing a whole of market equity release solution for introducers and their clients, through parent company Key Retirement; leading specialist provider of financial solutions to the over 55’s. Over 7,000 introducers encompassing IFAs, mortgage brokers, accountants, solicitors and estate agents are registered to refer business to Key Partnerships. In return for the referral, intermediaries earn on average £1,319 on completion of the loan.
