The research, carried out in April 2022, shows that the average age at which people have paid off their mortgage is 51 and after that people are using their wealth, including money that is held in property, to help the younger generations.

5% of those surveyed in 2022 said that they had already helped their grandchildren to become first-time buyers (an increase from 3% in 2016), and a further 20% said that they would ‘definitely or probably’ be doing so (an increase from 14% in 2016).

Also, 14% said that they had already helped their children to get onto the housing ladder (a decrease from 19% in 2016) and 19% said that they ‘definitely or probably’ intended to (an increase from 13% in 2016).

The number of people helping members of the wider family is also on the increase, with 3% saying that they have already helped someone, compared to 2% in 2016 and 9% saying that they intend to help someone, compared to 3% in 2016.

The 2022 survey shows that the typical amount of money that relatives are giving to the younger generations has increased by 25% in the last six years to almost £32,000.

Using equity within a home has almost doubled since 2016, according to Aviva, with downsizing and equity release being the most popular way of finding the funds. In 2016 financial help was more often provided from savings and investments, when 71% of people used these funds to help a child or grandchild to find a property deposit and 10% used them to help buy a house outright.  Also, 3% cashed in pensions to provide funds to help buy a property.

Caroline Murray, partner and head of Graysons’ property team says:

“Many first-time buyers receive loans from parents and grandparents to help purchase their homes – it is certainly becoming more common.  It is worth remembering that the person giving the gift will more than likely need to give assurance to the mortgage lender that it is a gift and that they give it freely – not expecting it to be paid back – and that they have the funds to provide such a gift. 

Also, if the gift giver dies within seven years of giving it, inheritance tax may have to be paid on the gift if it falls outside the giver’s annual exemption.  If you want to know more about that, speak to one of our private client experts or find out more on our web pages”.

For more information on buying property, visit our web pages, or contact our property experts to arrange a discussion.

Author: Caroline Murray