Housing boss' homeownership scheme requires no deposit or mortgage

Published by 24publishing for 24dash.com in Housing and also in Central Government, Communities, Local Government

A housing association is buying new homes off housebuilders then offering them to would-be homeowners through a 25-year payment plan, without the need for a deposit or traditional mortgage.

The product – aimed at first-time buyers and long-term renters – was launched last year by housing group, Gentoo, and has already helped nearly 50 households into homeownership. It’s also lowering the age of homeownership with average purchasers age 25, compared to the national average of 30.

The ‘Genie Home Purchase Plan’ sees would-be buyers able to choose from a selection of Gentoo homes which are available at a range of monthly residency fees - which includes administration and interest costs - reviewed every five years.

The plan, says Gentoo, gives flexibility for homeowners to pay as much as they can afford into the home with no charges for early repayment and the option to pay a “minimum residency fee” if they fall on hard times.

The flexible 25-year payment plan - offered through Gentoo's FSA-regulated subsidiary 'Gentoo Genie Limited' - allows buyers to own their own home at the end of the plan.

Gentoo boss, Peter Walls came up with the product after worrying about how his children would be able to get a foot on the property ladder.

Recent research suggests only 53% of first-time buyers in the UK buy their house by themselves, often relying on parents or grandparents for deposits. Mortgage approvals have also fallen to an 18-month low according to Bank of England figures, making buying a first home harder than ever.

Mr Walls said: “The biggest barrier for many people hoping to live in a place of their own is getting a mortgage. The deposits needed are too high for most people and the conditions for applicants too stringent.

“If they don’t have well-off parents who can give or lend the money for a deposit a lot of people have to make do with paying rent into a home they can never properly call their own.”

The group is looking at buying increasing amounts of housing stock with hundreds more properties in London, North East and North West being earmarked.

Steve Hicks, managing director of Genie, said: “I’m really pleased that we’ve managed to put out there a genuine solution to a housing market which is increasingly pricing out young single people, professionals and families.

“As Genie grows it’s hugely satisfying to know we’re helping people to live in their own home.”