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Generation Home launches with mission to help people buy together

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Written by: Christina Hoghton
13/11/2020
The start-up mortgage lender received £500m-worth of initial mortgage enquiries from first-time buyers within days of its Insta launch.

Start-up mortgage lender Generation Home has launched and said that, within days, it received an ‘avalanche of applications from first time buyers’.

The new lender first ran a soft launch to a waiting list before officially entering the mortgage market via Instagram last week.

And it’s already had over £500 million-worth of mortgage borrowing enquiries from customers.

What’s new about Generation Home?

The lender specialises in helping family or friends buy together.

It does this by offering deposit and income solutions for first-time buyers and their parents, or other people who want to help them get on the ladder.

And cutting edge technology makes the process convenient, secure and transparent.

How it works

The Deposit Booster product lets parents or other family and friends invest into the buyer’s home, by securing a sum of their money against the property to boost the deposit.

It’s similar to some guarantor-style or parental support mortgage products.

But customers can structure the investment as an interest-free “deposit loan”, or as an “equity loan” where the amount repaid tracks changes in the house price. The investment can be gifted in whole or in part at any time, while repayment can occur in a number of ways, including by remortgaging once the homeowner has built up enough equity in their property.

The Income Booster product acts like a traditional joint or multiple mortgage, where the family member or helper has their name on the mortgage to improve the homebuyer’s affordability.

But it’s more flexible because smart technology enables the booster to make regular payments or just be on standby to help, but if they make repayments they earn shares in the property.

Boosters can apply to come off the mortgage where the homeowner’s earnings increase and they can afford the mortgage themselves.

Smart tech

Generation Home provides the technological and legal infrastructure to support this ‘fractional’ ownership of a property, ensuring fair division of ownership where participants want to manage their finances separately.

Potential borrowers could include unmarried couples keeping their finances separate, siblings or friends owning together, or parents providing repayment support for a mortgage.

Each pound put towards the deposit and mortgage repayments is reflected in each individual’s stake in the property. If you pay more, you are issued with more shares in the property. Repayments can be made from multiple bank accounts with the payment split controlled by the borrowers. Customers can track their ownership and gift or trade in shares with one another.

Generation Home co-founder and CEO, William Rice, said: “We created this business with the goal of improving the financial prospects of our generation.

“The solutions that we offer open up new avenues for inter-generational support and bring homeownership within reach for millions of people who thought that they were locked out of the market.”

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