New research by equity release referral service, Key Partnerships, has revealed that 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.
Key’s 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.”