The lender, which was set up by husband and wife Will Rice and Sophia Guy-White in 2019, gained permission from the Financial Conduct Authority to administer residential mortgages in September. It is currently selling direct to consumer through its team of in-house advisers.
These brokers will deliver its product in partnership with the Legal & General Mortgage Club, pencilled in for later this year.
Generation Home did not say how many advisers worked for the company but said plans for expansion were in place to coincide with its growth.
The firm raised its first tranche of institutional funding the same year it launched and since gaining regulatory permissions, has received £1bn in mortgage in principle applications. It did not disclose how much it had lent as it said the information was commercially sensitive.
Opening up to brokers
To find out how it should develop its product in preparation for its intermediary launch, Generation Home shadowed and interacted with brokers at Mortgage Advice Bureau (MAB) and Legal & General.
Michael Aldridge, vice president of sales and partnerships at Generation Home and former innovation director at London and Country, helped introduce Rice and Guy-White to these firms.
Rice, co-founder, said: “We know how important it is to give a really good experience. You don’t have a lot of opportunities to let your partners down.
“We’re using this period to learn as much as we can and make sure we bring something really compelling to our broker partners from day one.
“Rather than launching direct to intermediaries we’ve been launching direct to consumer and then we’re going to open up to intermediaries in due course.”
Danny Belton, head of lender relationships at Legal & General Mortgage Club, also introduced Generation Home to brokerages including London and Country, St James’ Place and Alexander Hall.
All have signed up to Generation Home’s panel and will gain access to the product following its exclusive rollout with the mortgage club.
Rice said the conversations helped Generation Home with the branding and proposition of its product as well as giving an insight into how it could serve brokers as a lender.
He said: “What are the key pain points that exist between lenders and brokers? And how can we as a new lender coming to market offer something different for them?
“That’s been really useful for us in trying to tailor a proposition that will hopefully be really different from anything they’ve seen.”
Rice said its underwriting approach and ability to use other means to raise a deposit or boost affordability made it a unique offering for brokers who were struggling to place cases for borrowers with low incomes, deposits and complex needs.
The product
The Generation Home product is similar to a joint borrower sole proprietor (JBSP) mortgage, except people who join the mortgage can choose to stop making payments at any time and can take themselves off the mortgage before the term ends.
Each party can set their own repayment amount and date. Additionally, the company gives mortgage holders access to a dashboard which tracks every payment and shows how much equity each party has acquired.
When the property is resold, Generation Home acts as an agent to give everyone their share depending on how much equity has been built up.
Rice said he wanted buyers to make educated decisions around their finances by giving them access to tools concerning their finances.
He added: “We’re trying to help customers understand that home ownership is an incredibly powerful mechanism to build wealth through time.
“Home ownership is the key engine by which previous generations built wealth. It’s an enormous driver of wealth creation. It doesn’t require financial sophistication to get returns, but younger generations are not getting access to it.”
Economic insight
Rice said he was surprised at how willing people were to share their personal information with them for the financial dashboard as he originally thought “adoption would be an upward battle”.
“It gives the opportunity to serve them better. If we’re able to understand how their financial circumstances change through time, we will be able to deliver them tailored products that are always designed to reflect any improvement in financial circumstances.
“Our underwriting is designed to deliver personalised remortgaging and home move offers for our existing customers that reflect any improvement in earnings or credit profile throughout the life of the loan,” he said.
Although no plans are currently in place, Rice said selling and adapting their technology to suit different platforms to help more people become aware of their finances was a potential goal for Generation Home.
“It is something we are open to exploring. But fundamentally as a business, we want to improve access to homeownership to as many people as possible and empower people to make the right financial decisions.”
