"Our Gradual Homeownership scheme is a new route onto the housing ladder, one which satisfies our customers’ homeowning ambitions, while treating them fairly."
The capital, raised from pension funds, will be used to support homeowners onto the property ladder.
With the first customers due to move in next month, Gradual Homeownership enables customers could buy a home worth six to eight times their household income.
This means would-be homeowners can avoid the usual ‘starter’ or ‘first-time buyer’ sized properties and instead live in a bigger home.
Wayhome customers require a deposit worth at least 5% of the purchase price. Wayhome then arranges to buy the home in full, in cash, by partnering with institutional funding partners. Customers don’t need a mortgage, and instead rent the share of the home that they don’t own at a market rate.
Customers can ‘staircase’ fee-free at any time, from a minimum of £50 up to 5% per year; and up to a maximum stake of 40%. Homeowners are encouraged to choose a home which has a rental payment level which works for them, typically at less than a third of their income, to ensure they aren’t priced out of staircasing if they choose to increase the stake in their home.
To be eligible, customers need a household income of at least £30,000, and are subject to an application process. Wayhome scours the open market to pre-select non-new build homes that will work for the Gradual Homeownership scheme. These are usually priced between £200,000 and £500,000, are in good structural condition with no building work needed, have between two and five bedrooms and are situated in desirable areas.
Customers will have security of tenure and only they choose if or when to sell their home.
Nigel Purves, CEO of Wayhome, commented: “It’s a grim reality that homeownership is out of reach for millions of people in the UK. Because lenders only offer loans based on low income multipliers, even those who have saved a significant deposit are often prevented from borrowing enough to buy the type of home that they can comfortably afford to rent.
“Our Gradual Homeownership scheme is a new route onto the housing ladder, one which satisfies our customers’ homeowning ambitions, while treating them fairly. Gradual Homeownership allows our customers to move into a bigger, better home. But it also means they can stay as long as they choose, decorate, and still share the maintenance costs fairly with our funding partners.
“More than 40,000 people who’ve registered with Wayhome already are key workers. We know how hard they’ve worked for us over the pandemic, yet so many of them can’t afford to buy a suitable home for themselves and their families. We’re on a mission to help change this.
“This initial launch is the first step towards a new world of possibilities for reluctant renters. There is so much more to come from us as we work to realise our mission of reinventing homeownership.”
