Mayor of London announces two first-time buyer schemes
The Greater London Authority (GLA) is to fund two new schemes aimed at helping Londoners into affordable home ownership and to accelerate the delivery of new homes.
Shared ownership is to be given up to £180m through the First Steps Challenge Fund. The fund aims to accelerate the delivery of 4,000 new homes between 2015 and 2020.
In addition, the Mayor of London announced up to £40m of loan finance for a new housing product where buyers will need no deposit or mortgage to purchase their home 100% outright.
This scheme, Gentoo Genie, aims to deliver 2,000 new homes over the next 10 years, helping people who would struggle to save a large deposit for a mortgage.
Gentoo Genie, provides long-term home purchase plans for first-time buyers and long-term renters which enables them to buy shares in their home every time they make a monthly payment.
The scheme is being introduced to London following Genie’s successful work in the North East of England. The GLA’s funding is from the Mayor’s Housing Covenant revolving fund and will be repaid in full within 10 years.
Steve Hicks, managing director of Genie, said: “There has been a lack of innovation in the housing market which has left would-be homeowners feeling frustrated and unable to buy their own house.
“This 10-year partnership with the GLA will help customers into a minimum of 2,000 new homes in the capital who otherwise would have struggled to own their own homes, because of the difficult market conditions in London.”
“The First Steps Challenge Fund is part of the £1.45bn secured from the government for affordable housing delivery in 2015-18.”
The money could take the form of an interest-bearing loan or equity investment, to encourage new players to deliver shared ownership homes and greater institutional investment into the tenure. When the funding is paid back it can be reinvested into delivering more homes.
Boris Johnson, the Mayor of London, said: “Shared ownership is crucial in helping the unprecedented numbers of people in London desperate for good quality low cost housing.
“I want the funding announced today to help thousands more Londoners own homes and create more developments like Erith Park delivering excellent affordable properties.”
Erith Park is an area of East London which is under development.