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Use your home to help support a first-time buyer

Your Money
Friday 04 November 2022
Like many others, you may have a loved one who was preparing to take their first step on the property ladder. But with house prices higher than ever before, and both borrowing and living costs increasing, homeownership has become more elusive than ever for many.

The new Stamp Duty holiday will help some. But with an average deposit of £74,000 needed to afford a home, many first-time buyers will be looking for further support.

That’s why now may be the right time to consider using some of your property wealth to make a real difference in the life of a family member or friend.

Equity release could help you gift a deposit

If you’ve owned your property for a number of years, it’s likely you’ve accrued a significant amount of value as a result of house price increases.

For example, if you bought an average-priced property in July 2012, it’ll have cost you £170,701. The same average property was worth £292,118 in July 2022 – a difference of £121,417.

If you’ve been fortunate enough to benefit from the rise in property prices over recent years, you could unlock some of that value in tax-free cash using equity release.

That means you could use some of your property wealth to boost your child or grandchild’s deposit to help them secure their first home.

And with a lifetime mortgage, the most popular form of equity release, you also get so much more, with a range of features that have made it an increasingly popular way for over-55s to boost their later life finances.

Make the difference without impacting your lifestyle

Not only are there no mandatory monthly repayments to make, but you always remain the owner of your home and can stay in it as long as you like. The loan, plus roll-up interest, is usually repaid when you either pass away or move into long-term care.

You can also choose to repay up to 10% of the initial loan every year if you wish to manage its size, subject to criteria. And with fixed interest rates for life, you’re protected from market volatility and unaffected by any future interest rate rises.

So, if you’re looking for a way to help a loved one onto the property ladder, equity release could help. Over one in five people who take out equity release across the UK do so to gift money to loved ones, including helping them with a house deposit.

The importance of expert advice

But the need for expert equity release advice is crucial. At Key, we have more than 20 years’ experience providing over-55s with specialist advice. And we've helped more than 1 million people decide if equity release is right for them.

Our equity release advisers will help you balance your current needs with your long-term plans, ensuring you’ve considered all your other options before going ahead.

You might be able to downsize your property to free up the funds you need, use savings, or even borrow from friends or family. So even though your home’s value could help a loved one onto the property ladder, we’re here to ensure the decision you make is the most suitable for your circumstances. And if equity release isn’t right for you, we’ll tell you.

We don’t charge anything for our initial advice. You only pay a fee if you choose to go ahead. That’s so you can explore equity release as an option with an expert equity release adviser without it costing you a penny.

If you’d like to find out more about equity release and see if it’s right for you, order your FREE guide by clicking here.

Or use our FREE online calculator here to see how much you could release today.

Equity release reduces your estate’s value and may affect your entitlement to means-tested benefits. Our equity release advice relates to Key-branded lifetime mortgages only - a loan secured against your home. With a lifetime mortgage, there are typically no monthly repayments to make, as the loan, plus roll-up interest, is repaid when the plan comes to an end. £1,299 fee only payable on completion.
Page last updated: Tuesday 16 April 2024