The Bank of Gran and Grandad has gifted close to £1m a day during the stamp duty holiday, according to data collected by Key.
The Bank of Gran and Grandad has gifted close to £1m a day during the stamp duty holiday, according to data collected by Key.
Following the stamp duty holiday, older homeowners have gifted £323.9m worth of their own housing equity to help younger family members buy their first home or move up the property ladder.
Key’s data shows the pay-outs for house deposits peaked in September last year at £40.6m and hit a low of £13.16m in February.
The average amount gifted for house deposits each month during the near 11 months of the holiday so far is around £27m or £51,595 per borrower, the figures show.
Will Hale, chief executive of Key, said: “With the stamp duty holiday giving people an unprecedented opportunity to climb onto the property ladder, the Bank of Gran and Grandad has stepped up to help finance it.
“This type of inter-generational generosity is more common than you think and even before this change, one in five equity release customers were using their housing equity to support younger family members.
“While the stamp duty holiday has undoubtedly stimulated some additional demand, we anticipate that older people will continue to want to provide this type of ‘living inheritance’ for years to come.
“A desire that it is even easier to fulfil with the flexible later life lending products that are available in today’s market.
“However, it is important that people’s generosity doesn’t leave them financially exposed and therefore, as always, specialist advice is vital so that all options are properly considered.
“With the ability to service interest, make ad hoc capital repayments and having the certainty of fixed early repayment charges, equity release can be an ideal solution to allow parents or grandparents to make these gifts while still having the flexibility to manage borrowing in line with their own changing circumstances.”
