Tuesday, April 12, 2011
Category:
Home Improvements
According to SHIP, the trade body for equity release, ‘the children of baby-boomers will have to pay seven times the price their parents did to get on the housing ladder’.
Findings show that in the first quarter of 1983, the price of an average first time buyer home stood at £20,810, compared to today’s price of £136,842, which marks a 558 percent increase. When it comes to deposits, in December of last year the average sum required for a first time buyer to purchase a property was reportedly 23 percent of the asking price, or £31,474. This is reportedly more than £10,000 greater than the total value of their parents’ first home. SHIP has therefore concluded that first time buyers are now ‘facing several challenges’.
It has been revealed that the average first time buyer who purchases a property without assistance is 37 years of age, which is eight years older than first time buyers who buy a property with their family’s assistance. However, it has been pointed out that many families are not in a position to help, what with inflation reaching 5.1 percent (RPI).
Director General of SHIP, Andrea Rozario, commented: "These housing figures really highlight the struggle that young people now face to take those first steps onto the housing ladder. House prices have risen far faster than incomes have done since the older generation bought their first homes. Furthermore, those who bought homes in 1983 and are now likely to be heading towards retirement will have benefitted from the increase in value of their home.
"They could well look to help their children by releasing a lump sum from their property - therefore providing the funds for an FTB deposit, whilst using the leftover amount to supplement a retirement income for themselves. For a lot of people equity release can act as a form of pre-inheritance, an opportunity to pass on their wealth to their families whilst still able to see the benefit it brings. It is important than any and all decisions are taken together as a family and by talking to a financial adviser. Whilst equity release is a viable option for many people, it is not necessarily the right one for everyone, and it is important that people seek advice to fully understand it."
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Homeowners who have recently managed to get onto the property ladder, but do not have the funds required to turn their new investment into a cosy home, could consider taking out a secured loan. One of many finance options available, a secured loan for
home improvements could allow borrowers to embark upon an array of projects in and around their new property. For example, any essential repairs could be carried out and, where extra living space is desired, an extension or conservatory could even be added to the property. Following such work, borrowers could completely redecorate and refurbish their home in accordance with their own personal tastes.
