21 Jun 2021
Legal & General sees equity release enquiries for home improvements more than double in 2021
- Enquiries relating to equity release for home renovations have increased by 134%, as increased interest in home improvements continues
- 96% rise in enquiries about gifting money to loved ones
2021 has seen a huge surge in over 50s customers seeking equity release to undertake home improvements, increasing by 134% compared to the same period last year, according to data from Legal & General Financial Advice.
The business compared the first 5 months of 2021 to the same period last year, with the data showing a huge rise in the number of customers looking to unlock wealth from their home to make renovations. This initially shot up in August last year, and has been one of the main reasons for customers looking to take out a lifetime mortgage since.
Recent research commissioned by the Good Home Inquiry found that the majority (63%) of people approaching later life in England see home renovations as a priority in the next two years. However, half (50%) of those aged 50-70 said the main reason they would not be able to carry out all the renovations they want is because they cannot afford it.
Gifting on the rise
The data also shows a 96% rise in the number of enquiries about gifting money to loved ones in the first 5 months of this year, compared to 2020. Research from Legal & General last year found 5.5 million parents expected to offer additional financial support to younger family members due to Covid-19, providing loved ones with an extra £1.9 billion1.
Requests to unlock cash for the purpose of gifting may come as parents and grandparents provide housing deposits following the Stamp Duty holiday, but the spike in requests may also be an indication of how the older generation has been relied on as a vital source of regular financial support for those hit by the pandemic.
Over the past year we have spent more time in our homes than ever before, which has led to a rise in home improvements to make our homes as comfortable, enjoyable and functional as possible. As well as cosmetic improvements, as we get older it’s important our homes adapt as our needs change and renovations can be vital in improving accessibility. Sadly, many people are not able to undertake this vital work because they cannot afford it. Unlocking equity from the home is one possible solution for those who need extra money to make much needed improvements
We know that the Bank of Family has been lending money for decades for things like house deposits but, during the pandemic, the older generation has been relied upon as a vital source of financial support. Our data shows there has been a signifigant rise in the number of older family members looking to use equity release to gift funds to their younger relatives, a trend that we expect to become more commonplace.
Giving money to a family member can be hugely rewarding and can often make good financial sense, but the key is not to lose sight of our own longer-term plans. There is a risk that people could be underestimating what they need to fund a comfortable retirement, and therefore it’s important to gift sensibly. This includes thinking about our own ambitions for our lifestyle in later life as we cautiously begin the transition back into our normal way of living.
Sara McLeish, CEO of Legal & General Financial Advice
Head of PR & Thought Leadership
Legal & General Retail Retirement
Retirement income, including annuities
Lifetime mortgages/equity release
Retirement financial advice