Over half of equity release used for gifting in Wales used on a house deposit

For young people trying to get on the property ladder, saving the money for a down payment is usually the hardest part. With property prices soaring across the UK in 2020, it became increasingly hard to stump up a deposit on a mortgage. 

However, homeowners over 50 who have either paid off or are nearing the end of their mortgage terms have been helping their children or grandchildren out. Between January and September last year, older property owners released over £530 million in equity to gift to family and friends. 

Key Advice, the UK’s biggest equity release company commissioned the report. Will Best, CEO at Key, said ““Helping out family and friends has always been a major motivator for older homeowners using equity release, but it is striking to see that more than half a billion has been gifted [SIC] in 2020”.

Equity release has helped many homeowners enjoy their retirements and help friends and family out over the years. To release equity from a property it is much like remortgaging, for a fixed term you can release money tied up in your home that you pay back over time. 

How have older people been using it?

In the last year, over-55s have increased their use of equity release. Around £59 million a month in the first nine months of 2020 was released from properties. Top of the list of reasons for releasing their equity were helping family members with housing deposits and early inheritances. 

In the months July to September equity release across the four nations topped out at £221 million, nearly half of that total was pumped directly back into the housing market, proving just how popular and effective the Stamp Duty holiday has been. 

From the nearly half a billion pounds of equity released in the first three quarters of last year, nearly 45% (£230 million) was used for down payments on properties. 

What have Welsh people been using equity release for?

In Wales specifically, most equity released was used to help out friends or family with deposits on residential properties. The average gift totalled nearly £50,000 in Wales in quarter three of 2020, proving to be a huge boost for the property market. 

For the first three quarters of the year, released equity that was gifted in Wales amounted to £14 million, 53% of which went to property deposits. 

How could you use the equity in your home?

Aside from helping friends and family, there are many reasons to release equity from your home. From home improvements to holidays of a lifetime. Check with an equity release specialist to see what you could do.