Enquiries about using equity release for gifting purposes have risen during lockdown, as older homeowners look to help younger generations, according to SunLife.
Simon Stanney (pictured), equity release director at SunLife, said the main reasons people opt for equity release are to enhance their own lifestyles, either by improving their homes or funding holidays and other large purchases, to boost disposable income, to pay off debt or to gift to family.
Gifting often pertains to things like weddings, university fees, and, perhaps most commonly, helping children buy their first home.
Usually, lifestyle improvements make up the bulk of enquires, but SunLife has reported receiving more enquires from older homeowners looking to use the equity in their homes to offer support to loved ones struggling with the added financial pressures brought on by the pandemic and resulting lockdown.
Stanney said: “We have definitely seen a shift in the reasons why people are enquiring about equity release since lockdown started from the more traditional ‘enhance’ to ‘gifting’.
“I think with so many people suffering financially it’s understandable that older homeowners – who have built up equity in their homes and are in a position to help – will be looking to support family in any way they can.”
According to Land Registry data, the average house price in the UK has risen from £58,250 in March 1990, to £84,620 in March 2000 and £231,855 in March 2020.
Those homeowners who have had their homes for 20 or 30 years will have seen them rise in value significantly; equity release lets them access that cash without having to move or downsize.
Stanney added: “In many cases, the family home would be inherited by the children anyway; equity release allows the gifting of that money when needed
“Our blog explains more about how equity release could help you live a more comfortable retirement and give some money to those you care about most.”