Grandma and Grandpa’s Bank: One in four grandparents now give cash assistance to new buyers – and the usual amount given has risen 25% in six years to £31,000
A quarter of grandparents have helped — or plan to help — their grandchildren become first-time buyers, a new study suggests.
The proportion of grandparents who help financially has risen by a third since 2016, when the survey was last conducted by insurance company Aviva.
The average amount given by grandparents has also risen sharply to around £31,000 – 25 percent higher than six years ago.
Useful: Grandparents who help their grandchildren buy a home usually do so with their own savings or by freeing up value from their own home
According to online broker Mojo Mortgages, the average starter deposit is now £33,000. But saving for a down payment becomes more difficult as the cost of living drains people’s finances. Rents are rising fastest in 15 years, with average rents rising £66 per month to £870 in the second quarter.
Grandparents who help their grandchildren buy a home usually do so with their own savings or by freeing up value from their own home, Aviva says.
The number of grandparents using equity release has doubled in the past six years. But millions of retirees are unable to help their children or grandchildren financially because they have huge bills themselves.
According to insurance company Legal & General, more than a third of people in their late fifties and early sixties have had to postpone their retirement by at least a year because of the cost of living.
One in ten think they will never be in a financial position to retire. Matt McGill, director of Aviva Equity Release, says: “Many younger people tend to have difficulties entering the housing market. The extent to which existing homeowners are now willing to use their equity to help family members up the real estate ladder has increased significantly.”