Nearly one in five (19 per cent) parents and grandparents who helped family members get on the property ladder used their own property wealth to do so, research from Legal and General has found.
The research argued this is indicative of family contributions being increasingly essential for home purchases.
To help meet these costs, 19 per cent of those providing support are doing so by downsizing their property, 12 per cent are using equity release, and 8 per cent are remortgaging.
Among Legal and General’s customers, 9 per cent used equity release for financial gifting in the first six months of the year.
Legal and General Retail Retirement managing director, Lorna Shah, said: “Property wealth remains one of the most significant assets for families across the country, so it comes as no surprise that relatives are using it to provide financial support to younger members buying a home.
“Although products like lifetime mortgages are always supported by specialist financial advice it’s important that anyone making a significant gift seeks help from a financial adviser, even if their property isn’t the source of their funds.
“Our research shows that, at the moment, very few parents or grandparents seek out professional advice when offering financial gifts to family members, unless they use a fully advised product such as equity release, and this can impact their finances in the long term.
“As equity release moves more into the mainstream, more people are likely to turn to it for help.
“The ‘Bank of Family’ is predicted to have a busier year than ever, so we might see more people drawing equity from their property to support their loved ones.”
The ‘Bank of Family’ is expected to help fund 42 per cent of UK property purchases made by those under 55 years of age, contributing to a total of 335,000 housing transactions supported by family lending in 2024.
This represents the largest number of property purchases since Legal & General began tracking lending from family members in 2016.
Gifting from parents and grandparents is also predicted to hit £11.3bn by 2026.
tom.dunstan@ft.com
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