Tom Blomfield Joins Generation Home

Generation Home Adds Tom Blomfield to its Board

Building on a recent $30.4m Series A funding round and a £300m loan facility secured from NatWest in mid-June, Generation Home, a mortgage lending startup focused on first-time buyers, is expanding its leadership team.

Tom Blomfield, previously known for his role as co-founder of the challenger bank Monzo and more recently as an Angel investor, is now joining a startup board for the first time.

A Novel Approach to Homeownership

Generation Home launched last year with a distinctive model designed to facilitate home buying. This approach enables family members to participate as co-equity holders in properties purchased by their children, sharing in the potential gains.

According to Will Rice, founder and CEO of Generation Home, this platform unlocks significantly greater capital from family sources – often referred to as ‘the bank of mum and dad’ – compared to traditional loans or gifts.

The UK Housing Challenge

The UK faces a significant housing affordability crisis. The English Housing Survey 2020 indicates that renters in the U.K. allocate an average of 35% of their income to rent, while homeowners with mortgages spend 18%.

High rental costs hinder savings, and escalating house prices increasingly exclude individuals from homeownership.

How Generation Home Works

Generation Home allows parents to contribute to deposits through an equity loan. The company then manages the repayment of these funds to the parents upon the sale of the property or a remortgage.

Repayment can also be initiated when the homeowner reaches a predetermined equity level, and the loan value can adjust with changes in property value.

Furthermore, the loan can be converted into a gift at any time via the Generation Home platform.

Tom Blomfield on Joining the Board

Blomfield explained to TechCrunch that his decision to join the board stemmed from his enthusiasm for the product itself.

He believes the solution is highly pertinent, yet has received limited attention in mainstream media.

He highlighted the common reliance of first-time buyers on financial assistance from parents or friends, often intended as loans.

However, mortgage lenders typically require a declaration that such funds are outright gifts, potentially leading to unintentional misrepresentation.

Blomfield praised Generation Home for creating a legal framework that allows parents to provide funds as a structured loan, with the right to repayment without needing to falsely declare a gift.

FinTech and the Customer-Centric Model

Blomfield drew parallels between Generation Home’s approach and the success of Monzo, emphasizing a focus on the user experience.

Traditional mortgage lenders prioritize the mortgage product, often treating the customer as secondary.

Customers are frequently required to adapt to the lender’s offerings, lacking flexibility.

He noted that Monzo aimed to reverse this dynamic, prioritizing customer needs and preferences.

Features like spending notifications and overdraft alerts, now commonplace, were innovative five to six years ago.

Generation Home, he believes, is adopting a similar strategy, concentrating on what customers truly value and providing adaptable solutions, rather than imposing rigid mortgage structures.