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BMPS: Big lenders could learn from private equity scheme affordability models – Cunnington

  • 14/09/2021
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BMPS: Big lenders could learn from private equity scheme affordability models – Cunnington
Lenders should get rid of legacy systems and adopt the affordability models of private equity home buying options such as Wayhome and Generation Home to help more borrowers onto the ladder.


Speaking at Mortgage Solutions’ British Mortgage and Protection Senate, Greg Cunnington, director of lender relationships and new homes at Alexander Hall, said he had been completing several cases a week with Generation Home in the month his firm had been using them. 

The discussion, which took place under Chatham House rules, centred on whether private equity homeownership firms could replace shared ownership and Help to Buy schemes. 

It was suggested that brokers needed to make sure clients understood the varying differences between each private scheme and government-backed initiatives especially when it came to pricing. 

Cunnington said: “You have Generation Home who are a lender, not a scheme. We’ve only been using them for four weeks and we’re doing several cases a week because the affordability at the high loan to value (LTV) is so smart, how they’ve done it all under the same charge and the way they look at the term into retirement.  

“It got me thinking immediately, if a big lender could find a way to get rid of legacy systems and adopt some of that, that could change the market. It really could.” 

The Generation Home loan is charged in the lender’s name, meaning there is no stamp duty liability. Cunnington said this allowed his clients to borrow up to seven times their income. 

He said as Generation Home would never have a marketing budget, it was up to him to introduce the lender and other alternatives as an option as early as possible. 

“There’s a way to get the idea out that these things exist,” he added. 

The lender launched to intermediaries in Q2 this year. Similar to a joint borrower sole proprietor mortgage, the Generation Home offering allows additional parties to contribute towards a mortgage. 

Each party can set their own repayment amount and date and they build up equity in the property which can later be sold or gifted to the occupiers. They can also stop making payments at any time and take themselves off the mortgage before the term ends. 

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