A new survey has found that over a third (36%) of Brits will be inheriting a property, equivalent to 18.64 million people.
The research by bridging lender Market Financial Solutions (MFS) of 2,000 UK adults found that the anticipated market value of the property they are due to inherit all or part of is £347,500.
This data is supported by research from Royal London, which estimates that £400 billion worth of property will be passed from grandparents to younger generations in the coming decade.
When asked their intentions once they have inherited the property:
- two-thirds (67%) of respondents said they have no intention of living in it, with 55% of respondents will be looking to sell as soon as possible so that they can re-invest the money in a different asset or property of their choosing – amounting to 10.25 million UK adults;
- a third (32%) are looking to undertake some form of refurbishment so that the property is in a better condition to sell or place on the rental market.
The study also revealed that that 25% have no idea what to do with the property being passed down to them with nearly two fifths of 18-34 year olds requiring advice on what to do with their inherited property.
Commenting on the study, Steve Bradley, from property insurance specialists UKinsuranceNET said: “What many of those questioned may not realise is, there is a lot that needs to be taken in to consideration.
“For example, depending on the value of the estate, they could be liable to pay inheritance tax (IHT) on this transferable wealth.
“Not only that, but when they do inherit a property, they need to make sure they have the correct property insurance as soon as possible, as this can be a grey area when going through probate – especially if it is unoccupied.
“It is important that any one thinking about leaving a property discusses all the options with a qualified adviser, as well as their beneficiaries. For example, a grandparent may think about putting their property in trust or equity release to limit any IHT liabilities for their children or grandchildren.
“Otherwise, the government could finish up with a large percentage of this transferable wealth”.