Government to look at home purchase plans

A Parliamentary roundtable hosted by Gentoo Genie has seen a consensus among key policy makers and politicians that innovation is needed to tackle a dysfunctional housing market.

A well-attended and lively discussion saw Managing Director of Genie, Steve Hicks, and Chief Executive of Gentoo answering questions and putting forward the argument that Genie be eligible for backing from the government’s private renting sector £10bn debt guarantee scheme to help first time buyers into homeownership.

Former housing minister, Baroness Hilary Armstrong, urged the government to look at home purchase schemes as a potential solution to issues surrounding homeownership.

She spoke on the possibilities that Genie could act as an entry point into the chain of homeownership. “I think this is something Michael Heseltine may well be interested in - because unless we get something that really pushes house-building and unlocks that chain everybody is talking about we are all in deep difficulties.”

Baroness Armstrong called on the government to take action, support diversity, and see how home purchase plans can unlock this chain.

Mr Hicks spoke on how backing from the government’s debt guarantee scheme could help home purchase plans attract investors and open up innovation to help first time buyers access homeownership.

He said: ”We want the ability to apply for the government debt guarantee scheme. The whole point of the debt guarantee is to encourage investment.

“We have spent the last 12 months talking to a number of partner organisations who can help us implement the plan outside the North East and the government debt guarantee scheme would help us deliver that to a ready and waiting consumer base.”

The ‘Delivering Innovation in Home Ownership: The role of Home Purchase Plans’ event at Portcullis House, House of Commons, saw politicians attend, including Jack Dromney MP, Labour’s Shadow Housing Minister, Bridget Phillipson MP for Houghton and Sunderland South, and Baronesses Andrews and Armstrong.

Key figures from the housing industry including: Shelter, Resolution Foundation, The Council of Mortgage Lenders, Halifax, Lloyds and the Town and Country Planning Associates were also present.

Lord Larry Whitty chaired the event. He stated: “Deep in the British psyche is the desire to own your own home.

“The reality is this [Genie] has big potential to help resolve the difficulty in homeownership.”

Jack Dromney MP commented: “This is an idea whose time has come. I look forward to working on the ground on this."

Baroness Kay Andrews said: “Unless there is support from the government to support diversity it is not likely to get going but I also know potentially the insurance funds that you are looking for are desperately looking for investment opportunities.

“I think it is absolutely in the government’s interest to look at this.”

Baroness Andrews added that London offers "interesting innovative opportunities" through the use of home purchase plans.

Paul Tennant of The Orbit Group, a social housing provider in the Midlands, South and East, said: “We are interested in supporting this for a number of reasons. Our own analysis shows there is a huge, huge demand for this product and that the biggest issue in the way of homeownership is deposits.

“We are a housing association but we do support people to move into home ownership. This issue is about being able to provide customers with affordable housing.”

Fiona Mannion, of the Town and Country Planning Association, said: “The planning system is often held up as the main problem in delivering houses but it can be seen that supporting the mortgage system as it is at the moment is just propping up existing house prices.

“We like to see products like this that genuinely deliver solutions rather than supporting the status quo.”

Mr Hicks said: “There is a space for mortgages - clearly mortgages aren’t going to disappear - but there is also the space for innovation.

“We have the customer base, we have built the product [Genie] we have the systems in place to deliver it, we have done a lot of the hard work.

“All we need now is the support and then we are ready to go and deliver Genie at scale.”

Mr Walls stated: “If you want to have a life of your own to save a 5% deposit is still a big ask.

“We need to get back to the younger generation to help them into homeownership.”