Genie to create £150m housing fund

Housing Wed, Mar 23, 2016 10:24 AM

A pilot scheme to help people onto the housing ladder has been so successful in its first year it is to be rolled-out nationally and a £150m national housing fund created.

Genie is a unique housing product in the UK, a 25-year homeownership plan which allows people to own a home without a mortgage or deposit.

Since its North East launch in October last year it has proved so successful that investors are now working with the company to offer Genie homes to customers in London and the North West - with the first new homes expected to be available from January 2013.

Genie managing director, Steve Hicks, said: "Genie is an innovative product which makes homeownership achievable to many people who are currently unable to own their own home. By making homeownership achievable Genie is in a position, long-term, to offer a new solution in a dysfunctional housing market.

"As a consequence of our first year of success Genie is currently in discussion with a number of strategic investment partners, who share our vision and values, with a view to taking the Genie concept outside the North East and proving it at scale.

"We intend to attract long term investment to expand Genie into a major provider of home ownership finance in the UK."

By October 2014 it is planned there will be £150m worth of Genie homes available due to this investment. Currently they are solely funded by the Gentoo Group.

Genie was the idea of Peter Walls, the chief executive of Gentoo, who decided there must be a way for young people priced out of mortgages to pay cash into their own home - instead of putting money into renting.

He said: "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.

"If they don't have well-off parents who can give or lend the money required 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 customers, once approved, choose their home from a bank of new Genie homes. They pay a monthly residency fee which is fixed for five years and subject to review every five years.

Customers acquire shares in their home as soon as they start their payment plan and at the end of the 25-year period own their home outright.

To qualify for Genie customers must be over 18 with a household income of at least £18,000 a year.

Last year people moved into 47 Genie homes with a take-up rate, on approval, of almost 100%.

Lorri Haig, David Newton and their daughter Isobel, of Sunderland, live in one of those homes.

David, a 28-year-old former soldier who now works in Traffic Management, said: "We had spoken to a financial advisor in the past, but were told that we would need a 10 per cent deposit in order to get a mortgage.

"We simply didn't have that money, so we moved out of our one bedroom apartment and in with Lorri's parents to save up for it."

Lorri heard about Genie and realised the scheme could provide the ideal solution to the family's housing worries.

She said: "I just thought this solution would be perfect for us. We really wanted to provide a proper family home for Izzy, but we didn't have the money for a deposit and saving is hard when you have children. Now we have our dream home along with the security of knowing what our payments will be for the next five years."