High property prices are making it very difficult for young people to own their own home. New research from Legal & General has shown that more and more young people are looking to their friends or families to help them take a step onto the property ladder.  The Bank of Mum and Dad (BoMAD) will be equal to a £5.7 billion mortgage lender. A staggering 27% of all buyers will receive help from friends or families in 2018 which is a 2% increase from last year. The research has shown that one in four UK housing transactions will be a result of help from parents or grandparents. This raises questions about the sustainability of the current housing market. There needs to be more opportunities for young people to step on the property ladder without having to seek financial help from those around them.

In order to provide loved ones with help, it means dipping into savings and accepting a lower quality of life when they retire.  One in five parents and grandparents are suffering the effects of this; those who are over the age of 55 are accepting a poorer standard of living in order to help those who they love buy a home. This is backed up by the fact that more than 27% of those approaching retirement say that they are worse off as a result and this pressure adds uncertainty to retirement.

One potential way of lessening the effects of this through retirement is to unlock some of the equity from your home. The research from Legal & General showed that equity release is growing in popularity, with 44,000 transactions now being supported through equity release. The research also points out that only 4% of homeowners aged 55 or over have used equity release. The market is growing however there is still room for growth. Equity release should become a part of retirement planning.

Equity release describes a range of products that allow a customer to release some of the cash stored up in their home without needing to move. The money is released from the home, is tax free and is one of many options available to home-owners over the age of 55 who have found themselves property-rich but cash-poor.