Meanwhile the professional investors get a property investment and monthly rent minus the red tape that is usually facing landlords.
Home buyers get to be the owner of a new home and have the chance to buy up to 100 per cent of it or even sell it; and if the value of the home goes up, both the homeowner and the investors share the capital gains.
The platform allows buyers to put in as little as £10,000 or one per cent of the property’s value (whichever is higher) - with qualified property investors who purchase the rest of the house, providing an option with no direct exposure to mortgage interest rate rises.
Through Allbricks, the homebuyer avoids any threat of rising mortgage rates by paying rent on the portion they don’t own as a dividend for the investors, and regularly has the chance to buy a greater stake in their home until they own it outright.
Allbricks claims it also removes another huge cost associated with homeownership – maintenance and repairs. Amidst a worsening cost of living crisis where disposable incomes are being slashed across the board, homebuyers that go through Allbricks do not have to pay for costs associated with repairing key structural issues or built-in appliances.
This approach not only safeguards the homeowners' investment but also protects the interests of investors.
Available initially in London with a view to scaling up to the rest of the UK, the people behind the scheme say prospective buyers - whether first timers or moving up the ladder - can potentially afford to buy any home they could afford to rent. It describes this as “true gradual home ownership” as homeowners can buy more bricks over time or buy their home outright.
Allbricks is available to first-time buyers and home movers who pass affordability checks, and they can choose any sort of property - this is not restricted to specific developers, new builds or leasehold properties.
“As there’s no mortgage and no debt, the home buyer’s purchasing power is based on what they could comfortably afford to rent rather than mortgage-based income multipliers” says a statement from Allbricks.
It continues: “Ultimately, the homeowner is in the driving seat. Provided they keep up with monthly payments, they can keep pets and make their own interior design choices (as long as they don’t reduce the home’s value). Once the first investors have owned their bricks for three years, homeowners get the chance to buy five per cent of them annually. And the more the homeowner buys, the smaller their rent payment to the investors.”
There’s also a property management programme on offer which includes a dedicated property manager, buildings insurance, regular gas/electrical safety inspections and an annual repairs budget.
Earlier this year Allbricks chief executive Shahram Shaida said: “Mortgages have been helping people into homes since the 12th century, but the world has moved on - we’ve now got outdated systems of lending dragging people down with them. Other solutions have just tinkered with different mortgage levers, but we’ve created a whole new model. The launch of Allbricks today brings a modern alternative, developed over six years, that democratises wealth creation by unitising UK home ownership and property investment.
“We’ve written off a generation, casually calling them ‘Generation Rent’, when they still want to own their own home. A system that’s more inclusive, that keeps people in their communities and makes home ownership more accessible is well overdue.
“My mission is to put the fading dream of home ownership back within reach. By bringing together those who want to own a home and investors who can contribute to that goal, we’re aiming to disrupt a market that has been closed to so many for too long.”