No-mortgage scheme lets first-time buyers purchase new homes
Thursday 16th August 2012
An initiative which allows first-time buyers to purchase a new home without a deposit or mortgage says it has signed up 50 young house purchasers – with an average age of 25 – since launch less than a year ago.
Genie is the brainchild of Peter Walls, chief executive of Gentoo Group, who was worried about how his own children would be able to get a foot on the property ladder.
Walls, who has 34 years’ experience in housing, decided there must be a way for young people priced out of mortgages to pay cash into a home – instead of putting their money into renting.
He said: “When my own children finished university I decided to put my thoughts into action and came up with Genie.
“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.”
Genie buys new homes off house builders. It then offers these homes to Genie customers through a 25-year home purchase payment plan, authorised by the Financial Services Authority.
Once the customer sees a Genie home they like, they sign up to the Genie agreement and pay a ‘monthly residency fee’. This includes a small administration cost, interest and buying the home off Genie. This fee is set every five years.
If the Genie customer comes into more money, they can pay off more of their house. The more money paid in, the quicker a house is paid off, without any early repayment fees added.
At the moment 50 homes are being lived in by Genie customers, five are on reserve and a further 23 are being marketed.
There are big plans for expansion, and Genie is looking at buying increasing amounts of housing stock, with hundreds of properties in London, the 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.”
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