Older homeowners gift £324m since introduction of stamp duty holiday

Older homeowners have gifted nearly £1m a day during the stamp duty holiday, according to new data from Key.

The equity release adviser revealed that the “Bank of Gran and Grandad” has gifted £323.9m worth of their own housing equity since the stamp duty was announced in July last year, 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 this year in the run-up to the original deadline of 31 March for the stamp duty holiday, before it was extended in the Budget.

The figures also showed the average amount gifted for house deposits each month during the 11 months of the stamp duty holiday equates to £51,595 per borrower. 

The stamp duty holiday ends on 30 June with the threshold reduced to £250,000 before being reduced again to its original £125,000 from 30 September. First-time buyers will continue to pay no stamp duty on the first £300,000 of homes worth less than £500,000.

“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,” Key CEO, Will Hale, commented. “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.”

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