Following on from mid-June, when first-time buyer mortgage lending startup Generation Home raised a $30.4m Series A round and a £300m loan facility from NatWest, it’s now adding to its board. Although known for becoming an Angel investor since leaving Monzo, the challenger bank startup he co-founded, Tom Blomfield hasn’t joined any startup boards.
That changes today with the news that he is joining Generation Home.
Last year, the startup launched a radically different model for home buying – effectively allowing relatives to become co-equity holders in the properties their children bought and go along for the ride.
Generation Home founder and CEO Will Rice says the platform, therefore, unlocks far more significant amounts of capital from ‘the bank of mum and dad’ than happens typically when money is loaned or gifted to the next generation.
The U.K. property problem is acute. According to the English Housing Survey 2020, the average U.K. renter spends 35% of their income on rent compared with 18% for homeowners paying a mortgage. High rents inhibit their ability to save, and house price inflation locks more people out of homeownership.
Using Generation Home, parents can contribute deposits as an equity loan. Generation Home then takes responsibility for the repayment of funds to the parents upon a sale of the property or remortgage. A refund of the loan can also be triggered once the homeowner’s equity in the property reaches a pre-agreed level, and the loan value can reflect changes in the house price. Plus, the loan can be converted into a gift at any time through the Generation Home platform.