Millions of under 35s are relying on inheritance to get on the property ladder
On average, 18-24s expect to inherit around £222k from parents and grandparents, while 25-34-year-olds expect to inherit £292k.
- Two years ago, around a quarter (27%) of 18-34s said that if they inherited a property from family in the next 12 months, they would keep it.
- In contrast, the majority (55%) of under 35s would now keep the property.
- Further information from Tower Street Finance’s Inheritance Index report can be found at: https://towerstreetfinance.co.uk/the-inheritance-index/
Rising living costs, and high interest rates and property prices, mean that one in six (17%) 18-24-year-olds and 15% of 24-35-year-olds are entirely reliant on inheriting money in order to get onto the property ladder, according to new research by the Probate Lending experts at Tower Street Finance.
Of those aged under 35 who already own a property, around one in ten (11%) are reliant on inheritance in order to buy a bigger home.
The study explored attitudes to giving and receiving inheritance, comparing figures from a survey run in Autumn 2022 with one run in Autumn 2020 to see how expectations and intentions have changed.
The majority of under 34s (58%) said they expect to receive an inheritance from their parents, and a quarter (26%) expect to receive money from one or more of their grandparents when they pass away too.
Those aged 18-24 expect to inherit £105k from parents, while 25-34s are hoping for a larger inheritance of £175k.
On average under 34s expect to inherit £117k from their grandparents.
Two years ago, around a quarter (27%) of 18-34s said that if they inherited a property from family in the next 12 months they would keep it, while more than a third (36%) would sell it.
In contrast, the majority (55%) of 18-34s would now keep the property and a quarter (25%) would sell it.
Those who are fortunate enough to be listed as a Beneficiary in a Will, shouldn’t expect to receive their ‘windfall’ quickly though.
While experts advise that it currently takes 9-12 months before a Beneficiary will receive any money from an Estate, half of under 24s (50%) and four in ten 25-34s (40%) thought it would take less like 6 months.
Dicky Davies, Business Development Director and co-founder at Tower Street Finance added: “Falling property prices may be good news for those hoping to get onto the property ladder in the coming months, but rising interest rates are set to cause mortgage misery for millions, and rising living costs are leaving many with very little disposable income to put away for a deposit too.
It’s clear from many young Brits are relying on receiving an inheritance to get a house deposit together or move into a bigger property, and it’s completely understandable why.
What is worrying is many are unaware of how long the Probate process takes, and the wait they could face to get their inheritance.
We recognise how frustrating the Probate process can be and have developed a range of no-risk solutions to help people access their inheritance sooner.
Parents or grandparents who can afford to give some inheritance in advance may want to consider this too. Inheritance Tax rules state that cash gifts made up to seven years before someone passes away are not liable for tax, meaning that children or grandchildren hoping to get onto the property ladder soon could get a financial helping hand much earlier.
However, if a cash donation of £3,000 or more is made in the seven-year period before the individual passes away, then inheritance tax (also known as IHT) may need to be paid. There are various levels of tax depending on the number of years between the donation and the death, and the Estate value. It’s worth speaking to a Probate Solicitor to discuss your options.”
For further information about this research please visit: https://towerstreetfinance.co.uk/the-inheritance-index/.