UNLOCKING PROPERTY WEALTH: HOW ‘FAMILY BANKS’ ARE ASSISTING ALMOST HALF OF UNDER-55S PURCHASES
BY NICKI SPARKS
In the current competitive housing market, young homebuyers increasingly turning to family for financial support, often referred to as the “bank of mum and dad.” With rising property prices and stringent mortgage requirements, nearly 48% of property purchases among buyers under 55 now involve family contributions. These contributions may come in various forms, including direct deposit assistance or co-signing mortgages.
This trend is driven by the growing property wealth of older generations, who are willing to leverage their home equity to help younger relatives. Intergenerational wealth transfer plays a crucial role in facilitating homeownership, allowing older homeowners to utilise their assets while they are still living. Research from Legal & General projects that financial gifts from parents and grandparents could reach approximately £11.3 billion by 2026, with financial support coming from downsizing, re-mortgaging, or equity release.
Family support can significantly enhance a buyer’s deposit, enabling access to better mortgage rates and improving their chances of securing a home. Moreover, knowing that family members are invested in their property can provide emotional reassurance, boosting the buyer’s confidence in making such a significant financial commitment.
As property wealth remains one of the most substantial assets for families, it’s unsurprising that many are choosing to assist their relatives in this way. This article does not constitute financial advice but emphasises the importance of seeking professional financial advice to explore options and make informed decisions, ensuring that families can maximize the potential of their property wealth while securing their financial futures.
For more information please contact:
Kay Kowalewska | Independent Mortgage Adviser Dentons Mortgages
Nicki Sparks | Mortgage Consultant Dentons Mortgages
Email | enquiries@dentonsmortgages.co.uk
Website | www.dentonsmortgages.co.uk
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