Grandparents gifted more than £400m during stamp duty holiday
Analysis by equity release adviser Key shows older homeowners have given nearly £1m a day for house deposits using equity release plans since the stamp duty holiday started last summer.
Chancellor Rishi Sunak announced in July 2020 that no stamp duty would be due on homes worth up to £500,000 as a way of helping those struggling financially during the pandemic.
The threshold was reduced in July to £250,000 and will revert to the original £125,000 from 30 September.
After this date, first-time buyers will continue to pay no stamp duty on the first £300,000 of homes worth less than £500,000.
The Key data shows pay-outs for house deposits peaked in June this year at £40.838m as the £500,000 nil rate ended.
The second biggest month was September 2020 when gifts totalled £40.622m.
They hit a low of £13.16m in February in the run-up to the original deadline of 31 March for the stamp duty holiday before it was extended in the Budget.
So far this month, £16,099m has been gifted by the Bank of Gran and Grandad.
The average gifted for house deposits each month during the near 15 months of the stamp duty holiday so far is around £29m or £56,000 per person, according to the figures.
Will Hale, chief executive at Key, said: “Over a 19-month period, more than £437 million worth of housing equity has been ‘recycled’ – moving from one generation to another to support their housing ambitions.
“While the Stamp Duty holiday helped to supercharge the older generations’ desire and ability to get children and grandchildren on the property ladder, the end of this incentive is unlikely to dim this appetite.
“Homeownership remains an ambition for many people – one that over-55s are eager to support – so all the signs suggest that many first time buyers will still benefit from older relatives’ generosity as well as no stamp duty on properties worth less than £300,000.”