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Bank of gran and grandad: One in four grandparents now give cash help to first-time buyers – and typical amount given is up 25% in six years to £31,000
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A quarter of grandparents have assisted – or are planning to help – their grandchildren become first-time buyers, a new study suggests.
The proportion of grandparents helping out financially has risen by a third since 2016 when the research was last carried out by insurer Aviva.
The average amount given by grandparents has also increased sharply to around £31,000 – 25 per cent higher than six years ago.
Handy: Grandparents who help their grandchildren to buy a property typically do so using their own savings or by releasing value from their own home
The average deposit required by first-time buyers is now £33,000, according to online broker Mojo Mortgages. But saving towards a deposit is getting tougher as the cost of living eats into people’s finances. Rental costs are rising at the fastest rate in 15 years while average rents rose by £66 a month in the second quarter to £870.
Grandparents who help their grandchildren to buy a property typically do so using their own savings or by releasing value from their own home, Aviva says.
The number of grandparents using equity release has doubled over the past six years. But millions of retirees are unable to help their children or grandchildren financially because they are battling soaring bills themselves.
Over a third of people in their late 50s and early 60s are having to delay retirement by at least a year due to the cost of living crisis, according to insurer Legal & General.
One in ten think they will never be in a financial position to retire. Matt McGill, managing director at Aviva Equity Release, says: ‘Many younger people tend to encounter difficulties when seeking to enter the housing market. The degree to which existing homeowners are now prepared to use their own wealth to help family members onto the property ladder has increased notably.’