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Generation Home

Generation Home review: Helping first-time buyers save for a deposit

If you’re struggling to get on the property ladder, find out whether Generation Home could help.

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By

Rachel Wait

Updated

Fact checked

Generation Home launched in 2020 with the aim of helping first-time buyers save up enough of a deposit and qualify for a mortgage. We explain how it works.

What is Generation Home?

Generation Home is a start-up mortgage lender designed to help first-time buyers get on the property ladder. It does this by allowing friends and family members to either go on the mortgage with the buyer or contribute to the deposit.

How does Generation Home work?

There are 2 main options with Generation Home: the Income Booster and the Deposit Booster.

Income Booster

An Income Booster can be a friend or family member who agrees to go on the mortgage with you to help you borrow more. They do not need to live in the property but can help you qualify for a larger loan by adding their income to the mortgage. Up to 6 people can go on the mortgage, but they will need a good credit rating to apply.

The Income Booster will be jointly responsible for the loan, but it’s up to you to work out how you will divide the repayments. Income Boosters can either make regular contributions and build up a stake in the property, or they can simply be on standby to help if you need it. Once you can afford the loan yourself, the Income Booster can be removed from the mortgage.

Income Boosters will not be on the property deeds and they are not guarantors, so they do not need to use their own property or savings as security.

Deposit Booster

A Deposit Booster can be a friend or family member who helps home buyers with their deposit. Rather than simply gifting them money, the Deposit Booster contributes to the deposit via a loan.

The loan can either be a deposit loan where the original amount borrowed will need to be repaid, or it can be an equity loan. With an equity loan, the balance will increase or decrease depending on fluctuations in house prices. So if the property value goes up, the value of the Deposit Booster’s financial stake would rise, and vice versa.

Deposit Boosters will not be on the property deeds.

Who is Generation Home for?

Generation Home is predominantly aimed at first-time buyers struggling to save up enough of a deposit to buy their first home. However, the lender can also help home movers and second home buyers, although it does not currently offer remortgages.

To qualify you will need to have a good credit rating and be buying a home in England or Wales. Generation Home cannot be used alongside shared ownership schemes, Right-to-Buy or auctioned property, and it cannot be used for buy-to-let purposes.

Is it safe?

Yes, Generation Home is authorised and regulated by the Financial Conduct Authority (FCA). This is an independent regulatory body for all financial services and institutions in the UK. It aims to protect customers and ensure financial markets are honest, fair and effective so that consumers get a fair deal.

How to apply

You can only apply online via the website. Simply click the “Get started” button and enter a few details about yourself to see if Generation Home can help.

To get a mortgage, you’ll need the usual documents such as ID verification, address verification, 3 months of payslips, 3 months of bank statements and proof of deposit.

Pros and cons of Generation Home

Pros

  • Can help first-time buyers get on the property ladder.
  • Boosters do not need to use their property or savings as security.
  • Boosters do not go on the property deeds so will not need to pay taxes.
  • Income Boosters can build up a stake in the home.

    Cons

    • You will need a good credit rating to apply.
    • Only available for homes in England and Wales.
    • Income Boosters are still responsible for the mortgage.
    • Mortgage rates may not be as competitive as those in the wider market.

    Our verdict

    If you’re struggling to get on the property ladder, Generation Home offers an innovative way of helping you to do so. Depending on whether you’d like help with your deposit or you’d prefer to have someone else on your mortgage, you can choose the option that suits your needs best. Just be sure to check that you meet the eligibility criteria first.

    Frequently asked questions

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