By Neil Young, Senior Advisor – Fable Homes, written September 2022
First time buyers (FTB) – remember them? There is so much talk about the rental market, we can forget about FTBs.
I am a keen advocate of the living sector covering the demands of the customer, whether they are owner occupiers or renters – whatever stage of their lives they are at. Over the years, in different guises, I’ve investigated ways for institutions to invest into the living sector. FTBs is an area I’ve explored – but, until now, to no avail.
A few months ago, I was contacted by Fable Homes. They are creating a route for first time buyers to go from renting to owning their chosen home without the need to have a cash deposit. Essentially, the FTB finds a home they want to buy, Fable Homes purchase it, and then part of the rent and part of the capital growth go towards their deposit. Once the ‘deposit’ represents 10% of the property value Fable Homes arrange the mortgage so the FTB can take ownership.This model works well for the FTB as they can live in their chosen home whilst ‘saving’ their deposit. From Fable Homes perspective they have a great rental covenant (ie the FTB) and are invested in residential real estate with a buyer ready to take ownership 3-5 years after purchase.
There is also strong technology behind the business.
This is the type of innovation that the living sector requires. Too often the real estate sector is too staid. It is interesting that the founders behind Fable Homes are not ‘property people’ – their background is varied and impressive. They have seen a problem and challenged themselves to find a solution. A solution that has taken time to arrive at. As I’ve mentioned on many previous occasions, I love being part of early-stage businesses. It never ceases to surprise how much effort is required to bring an idea to market. However, it’s always very satisfying.
I am delighted to have recently joined Fable Homes’ Advisory Committee as Senior Advisor. The first few meetings have been really interesting. There is a great focus on what needs to be achieved. It’s pleasing to see all perspectives are covered, from the customer (FTB) to financial institutions.
It’s going to be a fun journey. It has a really strong ESG perspective and I like the social good the business can bring. Fable Homes has lofty ambitions, I’m looking forward to helping the team exceed them!