In the continuation of mid-June when the first-time buyer real estate loan started Generation Home raised a $ 30.4million Series A round and a £ 300million loan facility from NatWest, he now adds to his board.
Although known to have become an angel investor since leaving Monzo, the challenger banking startup he co-founded, Tom blomfield did not join any startup boards.
That changes today with the news that he is joining Generation Home.
The start-up was launched last year with a radically different model of buying a home – effectively allowing parents to become co-owners of the capital of properties their children bought and to shop around.
Generation Home Founder and CEO Will Rice says the platform therefore unlocks much larger amounts of capital from ‘mom and dad’s bank’ than what normally happens when money is loaned or donated. to the next generation.
The UK property problem is acute. According to the English Housing Survey 2020, the average tenant in the UK spends 35% of their income on rent, compared to 18% for homeowners paying a mortgage. High rents hamper their ability to save and inflation in house prices is preventing more people from owning home.
Using Generation Home, parents can make deposits in the form of an equity loan. Generation Home then takes responsibility for repaying the funds to the parents upon a sale of the property or a re-mortgage. Loan repayment may also be triggered once the owner’s equity in the property reaches a pre-agreed level, and the loan value may reflect changes in the price of the property. In addition, the loan can be converted into a donation at any time, via the Génération Maison platform.
Speaking to TechCrunch about his decision to join the board, Blomfield said, “I met Will last year and what really turns me on is the product. I think it’s so relevant, and it hasn’t really been covered by the mainstream press. The problem with first-time buyers trying to get a mortgage is that they almost invariably rely on the help of their parents or sometimes their friends to help them out. I have had the experience of this and a lot of people see it as a loan and they intend to get that money back. But mortgage lenders make you sign a piece of paper saying it’s an absolute giveaway. So hundreds of thousands of parents across the country are essentially committing fraud – well-intentioned – to help their children access homeownership. So what I liked about the Generation Home product is that they have this new legal structure where parents can actually lend that money for deposit, but it’s structured like a loan if they want to. They have the right to get their money back eventually without having to lie. So that’s one thing that really attracted me to the business. It’s so relevant to everyone, and people are kinda blind to this problem.
I asked him if he thought there was a “monzofication” of business models from FinTech into FinTech, as suggested by the success of Monzo’s model, where the user is brought to the fore?
“There is certainly a lot of commonality between what we do at Monzo and what Generation Home is trying to do. The big mortgage lenders focus on the mortgage product and the customer is like an inconvenience. As a customer, you have to adapt to whatever the mortgage provider will offer you and it’s totally adamant. It’s very similar with Monzo – we’ve tried to reverse it and focus on what customers really want and care about every day. Simple things like notifications when you spend money or alerts before you overdraft – these are common now and weren’t five or six years ago. I think Generation Home is doing the same thing, focusing on the things that customers really care about and then giving them that flexibility and more features to meet their needs, rather than just pushing everyone into the shackles of what a mortgage is, “he said.