A dad who was ‘laughed at’ by mortgage brokers decided to take a different avenue into the property market, and is now living happily in his own three-bed family home in Sussex.
Robert Payne, 44, was enjoying a lucrative career in banking, but eventually decided he wanted a change to improve his work/life balance, and went self-employed with his own laser cutting studio at the end of 2019.
Payne said: “About half way through 2019, I really tried to strike a better work/life balance by shifting to four-days a week as I had so much guilt about how much time I was spending in the office rather than with my children.”
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He continued: “While I was working in the city, I’d already set up a little side hustle so decided to take the plunge and pursue this full-time instead. We also took the extra downtime to take the children on a once-in-a-lifetime adventure around the world too. I’ve also had the strong belief that life is for living, not about how much is sitting in the bank.”
As business grew, he relocated the warehouse to allow for more space, which meant selling up the family home and moving into a rental property in December 2020.
However, when he and wife Aimee, 38, started looking to buy again, they hit a huge hurdle.
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Payne recalled: “We had a really nasty shock when we realised how little most high street lenders would be prepared to lend us given the size of our deposit. It really opened my eyes to just how unfair the mortgage system is.
"We knew we wouldn’t classify as first-time buyers given we’d previously owned properties, but that didn’t mean we should be laughed off the phone or be automatically rejected.”
He considered Shared Ownership and other property schemes, but was put off by long waiting lists and various other caveats, so he and his wife did a bit of research and found out about Gradual Homeownership through a company called Wayhome.
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After exchanging, the family moved into their £384,000 three bed property in Faygate, West Sussex, in November 2021, having bought the property with a six percent deposit of just £25,000.
They plan to buy up to the maximum of 40 percent ownership on the house, before considering what to do next.
Payne added: “For anyone who has good credit, reasonable household income but not a big enough deposit, this is the perfect route to getting on the ladder. It was important for us to own our home and have that sense of security, and we treat our staircasing payments just as we would a mortgage.”
According to Wayhome, customers could buy a house worth up to 10 times their household income, as compared with 3.5 times if buying with a typical mortgage.
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“This means would-be homeowners can avoid the usual ‘starter’ or ‘first-time buyer’ sized properties and instead live in a bigger home, in a desirable neighbourhood, more suited to their lifestyle or family situation,” Wayhome explained.
Customers simply need a deposit worth at least five percent of the purchase price, before Wayhome arranges to buy the home in full, in cash, by partnering with ‘institutional funding partners’.
They can also ‘staircase’ - which means to buy more of the home – every month, from a minimum of £50 up to five percent per year, and up to a maximum stake of 40 percent.
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Speaking to the Mirror, Payne said the system was like a ‘hybrid of getting out of renting and getting back on the property ladder’.
He said: "You essentially buy with an investor instead of a mortgage company. We managed to buy with a 6 percent deposit.
"Stamp duty is an issue but in my position, it worked for us. It got us back on the property market. I can buy more of the property each month - I make a £1,000 overpayment each month.
"You can buy a maximum of 40 percent value of the property. I’ve done all my calculations to get up to that 40% and then we could look at traditional lending.
"You could at that point go to the bank and get a 60 percent mortgage, as you’d have the equity.
"We do pay rent on the part of the property we don’t own. We make two payments each month, one voluntary which is my staircasing payment to own more of the property and the second is my rent payment.
"If something big goes wrong, I am only responsible for my share of the ownership. So if the boiler blew up, I would only pay 7 percent of the bill.
"We have a wear and tear schedule which dictates that I’m responsible for day-to-day upkeep, but the big things would be the responsibility of everyone."
Topics: UK News
Jess Hardiman