The Intermediary – August 2026 - Flipbook - Page 44
withdrawing money with the intention of either
spending it themselves, or more commonly
Phillips says lender innovation is already
moving to meet that demand. “Intergenerational
gifting it to their children or grandchildren to
support has become a key pillar of the modern
help them buy a home.
mortgage and property market, particularly as
“The other driver is property prices, as the
affordability pressures and deposit restraints
house price growth we have seen has meant far
have made it harder for younger people to buy
more clients are becoming liable to pay IHT –
independently,” he explains.
even those with relatively modest properties are
finding they face significant IHT charges.
“It’s an emotive subject. The clients have paid a
“Separate to intergenerational giving, we are
also seeing continued innovation from lenders
to allow family members to provide support
high rate of tax throughout their life, made sure
without putting their hands in their pocket or
they have saved enough for retirement, and then
unlocking equity.”
feel it’s unfair to be taxed again when they die.”
How the market is responding
Phillips points to April Mortgages’ 100% LTV
JBSP product as an example. It allows up to four
applicants and as many as three supporters to
Gifted deposits remain the most common way
contribute their income towards affordability
families are moving wealth down the generations,
calculations.
according to Marie Grundy, managing director of
mortgages at West One.
“We’re definitely seeing some older borrowers
downsize and use the proceeds to help their
The fourth pillar
Equity release has not traditionally been
associated with inheritance planning, but that is
family, but the bulk of the
wealth transfer activity
we’re seeing is still in the
form of gifted deposits –
it’s something almost half
of first-time buyers rely
on,” she explains.
“While familyassisted purchases and
concessionary sales –
where a property is sold to
a family member at below
market value – remain
a smaller part of the
market, they’re becoming
starting
With younger generations
facing cost-of-living pressures
and struggling to get onto the
housing ladder, many parents
and grandparents are now using
modern lifetime mortgages to
help with a deposit”
more familiar options
seeing more use of
equity release as a way
to reduce the value of
the estate, with clients
then passing the money
onto their loved ones,”
says Bawa.
“That’s only likely to
continue, in my view,
so it’s an area of the
market brokers need to
get familiar with. Equity
release is no longer
just a tool for those
as affordability pressures encourage families to
who need to supplement their pensions, but is
think more creatively about how they can help
being used as part of this great transfer of wealth
younger generations onto the property ladder.”
between generations.”
Grundy says lenders are responding to that
Will Hale, chief executive of Key Equity Release,
demand, adding: “With almost £4tn in UK
says the motivations behind equity release have
housing wealth owned by the over-60s, it’s
broadened considerably.
inevitable that lenders will continue developing
products that help families transfer wealth
He explains: “While equity release historically
has sometimes been seen as quite a ‘selfish’
during their lifetime, rather than waiting
transaction – funding things such as new cars
for inheritance.
or holidays – we are seeing more customers now
“We already have a far broader range of
mortgage options than was imaginable 20 years
ago – from concessionary sales and guarantor
using it for gifting and as an efficient way to
facilitate intergenerational wealth transfer.
“With younger generations facing cost-of-living
arrangements to Joint Borrower Sole Proprietor
pressures and struggling to get onto the housing
(JBSP), family offset mortgages, equity loans,
ladder, many parents and grandparents are now
and more.
“Over the coming decade, brokers will play a
larger role in helping families understand the
mortgage options available to them and the
42
to change.
“We are already
using modern lifetime mortgages to help with
a deposit.”
The support does not stop there, he continues:
“As VAT hits private school fees and university
trade-offs between affordability, ownership
costs continue to rise, more older customers also
structures and their longer-term financial goals.”
want to support family members with funding
The Intermediary | August 2026
