60% of parents would be guarantor for child’s mortgage
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Six out of 10 parents and grandparents would be prepared to act as a guarantor and use a charge on their own property to help a family member get on the property ladder with a high LTV mortgage, according to research carried out by the Equity Release Solicitors’ Alliance.
The survey of 1,142 UK adults also found that 68% of respondents would be prepared to gift a house deposit to their children or grandchildren.
It showed that 61% of parents and grandparents would consider using equity release to help out their children or grandchildren financially, with mortgage assistance being one of the major reasons for doing so.
53% of respondents said they would consider equity release to help their children with a deposit for a house, while 36% would consider it to help with mortgage repayments or rent and 31% to help with university fees.
The survey found that 70% of parents and grandparents would be comfortable releasing more than £10,000 from their property to help a family member.
24% said they would consider releasing between £10,000 and £20,000, while 19% would release between £20,000 and £30,000.
Claire Barker, chairman of ERSA, says that while equity release is traditionally taken out to enhance people’s retirement, the research shows people are increasingly looking to equity release to help their families too.
She says: “Financially, it is a very difficult time for young people with housing deposits rising, rent payments increasing and tuition fees set to triple next year.
“Unfortunately this situation is not going change for many years, and while many parents and grandparents want to help out most of their wealth is tied up in their property.
“For people wanting to help out their loved ones, equity release can provide a valuable way to assist younger family members at a time when they really need it.”
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