This is according to data from the equity advisory service, Equity Release Supermarket, which reported a 123% increase in home purchases as well as a 17% increase in the number of customers buying second homes in the first three months. from 2021.
There has also been a very noticeable increase in the number of customers using the money released from their homes to donate funds to their children – it is up 59% in the first quarter of 2021 compared to the same period in 2020.
Equity Release Supermarket suggested that these changes could have been caused by a number of factors, but most likely was the continued support parents provided to their children, especially those affected by the pandemic.
Indeed, as many young people struggle to move up the property ladder, especially given the benefits of the stamp duty holiday, which is available until the end of June this year, parents used their unlocking funds to help support their children’s homeownership goals.
Mark Gregory, Founder and CEO of Equity Release Supermarket, said: âThe results on the use of funds are probably what you would expect given the benefits of stamp duty leave, which helps those looking to move forward. or climb the real estate ladder.
âWhile the government guaranteed mortgage program, which was launched in mid-April, offering first-time buyers 95% LTV mortgages is welcome, even a modest Â£ 10,000 deposit on a property of Â£ 200,000 is a significant sum for those who have not been able to make it. start saving.
âIt also doesn’t help or support those who already own a property and are looking to increase their size or move up the ranks. Rightmove reported a 2.1% increase in house prices in April, reaching a record average price of Â£ 327,797 – therefore the shortage of real estate in the market is really pushing these prices up. “
Increased sales in London
Equity Release Supermarket also noted a strong increase in sales in the London area. Their average value of the amount borrowed in the capital has increased by 39% year over year, while the average case has increased by 33%.
In addition, sales in the southern UK region have seen a noticeable increase compared to last year. London, the South East and the South West all accounted for 52% of sales in the first quarter of this year, as well as 64% in value – an 11% increase from the same period in 2020.
Gregory added: âWe are seeing a return of consumer confidence in ‘central’ parts of the UK, with the stamp duty vacancies and the easing of foreclosure restrictions playing a key role in this heightened recovery.
âHigh net worth homeowners who take advantage of the low interest rates and flexibility that many life mortgages now offer, such as fixed-term prepayment charges, have also led to the rise in the number of mortgages. cases reported in London. “
Compared to the first quarter of last year, the use of borrowed money to repay debts fell 41%. The other reported declines in use were in new car purchases, down 57% and vacations, which fell 70%, mainly due to the comfort consumers experience having more money in their pockets, as well. as travel restrictions that halted vacation spending.
Gregory said: âAs a business, Equity Release Supermarket continued to grow in the first quarter. Our request and interest level increased 21% year-over-year and request value increased 15%.
âMarch alone also saw a sharp 47% increase in the level of inquiries and interest, and the value of inquiries increased by 22%. In addition, our revenues were equivalent to those declared in 2020.
âAll of our commercial performance attests to the quality of our advice, our dynamic and talented team of advisors and our forward-thinking approach. Although we have been stranded throughout the first quarter of this year, unlike last year, we have still grown and responded quickly to the changing needs of our customers. “