AMP (ASX: AMP) has teamed up with Australian fractional property ownership platform Bricklet to give property buyers without a deposit a leg-up into the market.
Under the agreement, AMP Bank will provide loans to owner occupiers who have secured their deposit through the Bricklet shared-equity platform – an innovative startup venture that gives investors a slice of the property pie.
The Sydney-based Bricklet, which was founded by Darren Younger in 2019, is an online marketplace that offers investors a fractional equity stake in properties.
For buyers who have the capacity to pay down a home loan, the platform secures the home deposit from investors who take a proportional equity position in the property.
AMP Bank has become the first lender to partner with the blockchain-based platform in providing loans to borrowers that meet the standard lending criteria.
AMP Bank group executive Sean O’Malley says deposits provide a significant barrier to entry for property buyers.
“Despite falling property prices in Australia, we know many people are still struggling to save a deposit for their first home,” he says.
“Owning property is an important part of building long-term wealth and financial security, so we are focused on supporting more Australians to take this important step earlier in life.
“This offer provides a different option for those who haven’t yet saved a large deposit but are earning enough to meet the ongoing financial commitment of a home loan.”
Through Bricklet, a homebuyer could have a single or multiple investors contributing to the deposit. Their equity stake in the property matches their relative contribution.
The buyer makes standard mortgage repayments to the bank, as well as an occupancy fee to the investor through Bricklet. But the homeowner can buy out the investor’s portion of the equity at any time or on the sale of the property.
“We’re enabling people to get a mortgage for their home and then rent the remaining piece from an investor,” says Younger, the Bricklet CEO.
“There are now a variety of opportunities for homebuyers, but it comes down to how they want to purchase property, and what they qualify for.
“One of the main reasons we created this was because a lot of people don’t qualify for government schemes. They either earn a bit too much, have already owned before, don’t meet the price cap, or miss out because spots are limited.”
Younger says buyers get all the benefits of living in the home, and all the gains from price growth of their share of the house.
“The proposition has received strong interest and planning is underway to expand the offer for more prospective property buyers,” he says.
Earlier this year, Bricklet launched a $20 million capital raise and planned a $100 million mortgage-backed securities issue to roll out its platform.
The company, which is majority owned by Sydney-based 'venture catalyst' Lakeba, is understood to have a $155 million worth of commercial and residential properties in its portfolio.
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