First time buyers in Wales paid an average deposit of £17,038. At the same rate of £180 saved per month, this group could expect to wait 7.9 years to afford a deposit. Meanwhile, first time buyers in Scotland paid an average deposit of £14,230 to secure a property, meaning it would take 6.6 years to save the correct amount.
A single equity release gift could propel a younger homebuyer onto the ladder in far quicker time. Indeed, data from the Key Market Monitor reports that the average sum gifted from equity release for use as a deposit in the UK reached £61,596 – far above the average deposit for a first-time buyer and therefore allowing them to secure a better rate mortgage with a lower LTV.
First time buyers in Scotland (83%) would enjoy the best loan to value following a family member using equity release to gift them a deposit followed by those in England (84%) and Wales (85%).
Les Pick, director of manufacturing and adviser propositions at more2life, commented:
“Trying to save enough for a deposit is daunting at the best of times but with the cost of living eating into people’s disposable income and interest rates squeezing affordability further, first time buyers are finding it harder than ever to take that first step onto the ladder. However, with the older generation often sitting on twenty or even thirty years of house price growth, now may be the time to consider whether an early inheritance could make a positive difference to someone’s home ownership ambitions.
“Shaving 11 years off the amount of time it takes someone to buy their first property and positioning them to get a better mortgage deal can make a real difference to their future finances. However, over-55s need to ensure that they fully consider all their options and speak to a specialist adviser who will help them make the right choice for their individual circumstances now and in the future.”
