The lender offers a product similar to a joint borrower, sole proprietor (JBSP) mortgage which allows family and friends of a homeowner to act as a guarantor and make optional monthly payments towards the mortgage.
It also offers a ‘DIY Help to Buy’ which allows other parties to contribute to the deposit on a property in return for equity which increases or decreases in line with the value.
Sold exclusively through adviser firms who are part of the Legal and General Mortgage Club, Generation Home recently joined the Twenty7Tec platform to widen its reach.
The likes of Mortgage Advice Bureau, Stonebridge Mortgage Solutions, JLM, Alexander Hall and The Right Mortgage are now able to advise on its products.
The lender hopes to widen the distribution of its range to the whole of the intermediary market by next year.
Rice said: “We have just under 4,000 advisers on our panel and during the course of next year we plan to roll out to the whole of broker market. We want whole market coverage by the end of next year. The support we’ve had from brokers to date has encouraged us to do that.”
Generation Home said its current business split was 60-40 with majority of products sold direct to customer, but hoped to raise its intermediary led business up to 80 per cent.
Broker assistance
Generation Home has worked closely with brokers during its inception and the subsequent distribution of its products through MAB with the help of Kevin Bray, intermediary mortgage manager and Michael Aldridge, vice president of sales and partnerships. Aldridge was former innovation director at London and Country.
It was following conversations with brokers that the lender decided to tweak its products as well as add remortgage and capital raising options.
Rice said the broker feedback was integral to its business as the issue of lenders entering and leaving the market after “doing too much too soon” was raised repeatedly by intermediaries.
Speaking at the Mortgage Solutions British Mortgage and Protection Senate in September, Greg Cunnington, director of lender relationships and new homes at Alexander Hall, lauded the Generation Home’s affordability structure and said mainstream lenders should consider following suit.
Replacing schemes
Rice said Generation Home’s proposition could be deemed a replacement to existing schemes such as Help to Buy or shared ownership.
“The product we provide gives a secure and efficient way for families to co-invest into a property with their loved ones. It offers an alternative where a customer might have previously used or relied on Help to Buy.”
He said the option for those who contribute to the deposit to see their equity change depending on the property value was an added incentive “because the control remains in the hands of the customers.”
Generation Home claims its rates and fees are competitive. In its brochure which has been distributed to brokers, a 90 per cent loan to value (LTV) product which is fixed for two years has a rate of 3.19 per cent.
Future growth
Generation Home has raised £30m in equity funding from investors so far including backing from Natwest, which is one of its funding partners.
It also has a referral arrangement with Barratt Homes where potential customers are informed of Generation Home products when they enquire about purchasing a home.
Rice said the lender was satisfied with the service it had been giving to brokers and clients as it put it in a position to “scale up aggressively”.
He added: “We want to become a top 20 lender in the UK by next year.”
