"Our goal is to expand homeownership to people who couldn’t otherwise get access to traditional home financing at the moment."
Nationwide has put £2.5 million into a fund specifically designed to encourage and enhance platforms such as Kettel Homes by bringing together start-up businesses with innovators, organisations and charities.
With a minimum deposit of 2%, Kettel works with customers to purchase the home they want to own and rent it back to them at market rates while they save their deposit, build their credit score and enhance their affordability. It works with property investors to purchase the properties, which are single-family homes bought for £125,000 - £400,000 outside of London, and then uses its platform to manage the entire process.
By fixing their rent, savings and future purchase price from the beginning, Kettel sets out a roadmap for first-time buyers to achieve their goal of homeownership within 36 months – ensuring the price of the property does not increase over time. Those using the service are asked to save a 10% deposit and will be given a standard repayment mortgage as they transition from renting to owning. If the customer decides not to purchase, they still get to keep their accrued savings minus a relisting fee and have the option stay on renting the property.
Kettel also helps future homeowners with financial literacy tools, reporting their rental payments to build their credit and navigate government incentives for first-time buyers.
It launched exclusively for first-time buyers in Birmingham, Coventry, Leicester and surrounding areas, with the first home purchases underway, and is expanding to other cities across the Midlands and North over the next 24 months.
Claire Tracey, chief strategy and sustainability officer at Nationwide, said: “As a mutual, we believe in the power of collaboration and that we can achieve more together than we can alone. Our Incubator is bringing together innovators, charities, organisations and experts to help tackle the effects of poverty. It is more important than ever that we act now, given the rising cost of living.
“The fact is many individuals who are struggling financially have to pay more for the same goods and services. More needs to be done to make things fairer for those who have the least means. But these are not easy issues to solve and require a truly collaborative, cross-sector effort. Through providing meaningful support alongside funding, we are looking to help transform the lives of those living in poverty through scaling long-term solutions to help tackle the challenges this presents.”
Trevor Stunden, CEO and co-founder of Kettel Homes, commented: “Generation rent has become a requirement versus an option for most millennials and gen z. We are setting out to change that by using a blended model to help give aspirational first-time buyers the structure they need to get their foot on the ladder. Our goal is to expand homeownership to people who couldn’t otherwise get access to traditional home financing at the moment. The long-term benefits of homeownership for both the individual and society are clear and makes for stronger families and communities.”
