10 min read

The family that pays together stays together: Two out of three families live in each other’s pockets

Posted in: Research

  • Two out of three British families provide each other with financial support
  • Generation Game: One in five receive money from their parents and grandparents for a property purchase – who in turn received financial support for their first home
  • The average amount contributed to a family member’s property purchase is £15,140 – a third of the average first-time buyer deposit (£46,000)
  • OneFamily has launched competitive lifetime mortgage products to help families unlock the £77,000 value hidden in their homes

The majority of British families (64%) provide financial support for one another, according to research from financial mutual, OneFamily.*

Many parents will assist financially with special occasions, such as weddings and christenings (24%) or to contribute to their child’s future by paying towards university tuition fees (20%).

One in five of the UK’s parents and grandparents (19%) have also provided their loved ones with financial support when buying a new home – this follows a proud tradition of ‘family finance’ in the UK with a similar amount admitting that their own family once helped them get on the ladder (20%). Those who contributed to their loved one’s property purchase paid out an average of £15,140** – a third (32%) of the average deposit required by first-time buyers in the UK (£46,000.)***

Georgina Smith, Managing Director of OneFamily commented:

“The rise in the value of UK homes has proven a double-edged sword for UK families. While those with property have seen the value of their homes increase exponentially, with double-digit increases in the last year alone, they have seen their own children barred from getting on the all-important first rung of the ladder. Most parents understandably want to help their children meet these financial challenges but they themselves are also faced with other obligations, such as the care of their own parents.”

In response, OneFamily has launched two new lifetime mortgage products aimed at helping to give families more options to help each other out, rather than having to move to a less expensive area, or downsizing. Research indicates that homeowners can access on average £77,000 by unlocking the value in their homes.

Georgina Smith continued:

“OneFamily Lifetime Mortgages help provide a way for families to access the value hidden in their own bricks and mortar without losing their most treasured asset, their home. Our products encourage the whole family to work together to take control of their finances and plan for their futures.”

OneFamily was awarded the “Best Provider for Product Innovation” in the Equity Release Awards in November 2016.  The mutual now offers six different types of lifetime mortgages and has gained praise from the industry for making it easier to unlock value in family homes to help fund intergenerational lending.

Innovations from OneFamily include the option for families to pay off up to 100% of the interest in regular monthly payments, just like with a regular mortgage.  Interest rates can be fixed or variable.  OneFamily also allows for payments to be capped on the variable rate, meaning that families can benefit from lower interest rates, but still keep control of their budgets.  With huge flexibility on offer from the mutual, families can effectively decide together how much interest they want to pay and for how long.

All lifetime mortgages come with a no negative equity guarantee.  This means homeowners will never have to pay back more than what the property is worth at the end of the loan term.