Written by Damon O’Connell, Director, Key Partnerships
Property wealth is firmly established as central to the financial planning process, offering a wide range of opportunities for all types of advisers – particularly in the growing later life lending market and in helping first-time buyers.
Transferring property wealth efficiently and effectively from older homeowners to first-time buyers is becoming increasingly important across the advice sector. Equity release advisers are seeing strong growth in gifting by customers reflecting the growing confidence that housing wealth can be used proactively as part of wider family and financial planning. This confidence is underpinned by product innovation and advice standards that focus on suitability, flexibility and fairness, supporting positive outcomes for both the customer and their family.
Key’s figures show releasing equity for the purpose of gifting accounted for nearly one in eight of all loans completed in the last three months of 2025 compared with less than one in 10 of all loans in the third quarter of last year.
The Bank of Mum and Dad – or more broadly the Bank of Family – is a key driver in the expansion of equity release and later life lending in general with equity release advisers reporting that growing numbers of customers are explicitly releasing property wealth to help first-time buyers.
Adding up the first-time buyer equity release opportunity
The challenge for first-time buyers is clear they need help with deposits. Larger deposits reduce loan-to-value ratios and help address affordability issues in a higher interest rate environment.
Data from Nationwide estimates the typical 10% first-time buyer deposit nationally is £23,000 rising to £44,800 in London and dropping to £13,100 in the north of England. A first-time buyer saving 10% of their take-home pay a month would need nearly six years to build up a £23,000 deposit. In London it would take nine years.
Equity release is providing a faster and more efficient route to a deposit – the over-55s, according to Government figures hold around £1.7 trillion in property wealth which could be accessed to support children and grandchildren.
When accessed responsibly, this wealth can be used to address real affordability challenges while maintaining appropriate safeguards for later life needs.
Our data shows the average initial amount released in the first quarter of last year was £62,930 – up 13% from the previous year – with customers in London releasing £145,471. The size of the amounts released shows the role they can play in providing deposits.
Our experience is that is happening – two-thirds of customers spread the funds they released across a range of purposes reflecting how modern lifetime mortgages are a multi-use product, supporting the needs of a broad profile of customers and rapidly becoming a key part of financial planning.
Gifting to children or grandchildren is certain to expand – last year’s Budget increased potential Inheritance Tax implications for many and equity release’s role as an efficient means of intergenerational wealth transfer will grow.
This reinforces the view of equity release as a strategic financial tool that is being increasingly deployed to safeguard day-to-day financial stability and to assist younger generations.
Understanding the lending opportunity
For later life lending specialists, mainstream mortgage advisers and even pension and wealth specialists the key foundation for success in the current market is expanding their field of vision. Crucial to that is developing a deeper understanding of the innovation that has already taken place in the equity release market.
Modern lifetime mortgage products offer a wide range of flexible benefits including the ability to make voluntary repayments as well as rate discounts for customers committing to paying some or all of the interest. This allows customers to mitigate the impact of compound interest and to manage the cost of borrowing while maintaining their standard of living and helping family. These features are central to delivering sustainable outcomes, enabling customers to retain control and avoid unintended long-term consequences.
There are options available which offer no early repayment charges, increasing flexibility in the event that circumstances change, perhaps on the back of an inheritance, or opening-up re-mortgage opportunities if rates fall.
Advisers need to dig deeper into the options available and assess benefits and protections such as fixed rates for life, certainty of tenure and no negative equity guarantees alongside cost of borrowing considerations and the specific risk preferences and personal circumstances of customers. This holistic assessment is fundamental to meeting Consumer Duty expectations around suitability, customer understanding and good outcomes.
Understanding the advice opportunity
It is estimated that only around 25% of Bank of Mum and Dad customers seek financial advice before helping out loved ones underlining the opportunity for advisers helping families and first-time buyers.
Equity release is increasingly being viewed as a practical way to unlock property wealth to support the next generation at a point of real need.
Many customers will not be aware of the options available to them and advisers should be looking at their over 55s customers and considering how they can better support their needs and wants.
If advisers do not offer equity release or later life lending support themselves they can look to referral partnerships with specialists such as Key Partnerships. Referring business to a trusted specialist partner will deliver new business for mainstream mortgage advisers as well as pension and wealth specialists and also provide holistic advice for customers while helping first-time buyers.
