ASX-listed AMP has become the first lender to partner with Sydney-based Bricklet to help aspiring buyers without a deposit meet the standard lending criteria and achieve their homeownership dreams.
Founded in 2019 by Lakeba Group, blockchain-based platform Bricklet is an online marketplace that offers investors a fractional equity stake in properties.
The deal will see AMP Bank providing 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, Business News Australia reported.
Through the platform, buyers who can afford to pay a home loan are able to secure the home deposit from investors who take a proportional equity position in the property.
Sean O’Malley, AMP Bank group executive, said deposits provide a significant hurdle for property buyers hoping to enter the market.
“Despite falling property prices in Australia, we know many people are still struggling to save a deposit for their first home,” O’Malley said. “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.”
Bricklet allows a single or multiple investors to contribute to the deposit, with their equity stake in the property equivalent to their relative contribution.
The homeowner makes standard mortgage repayments to the bank, plus an occupancy fee to the investor through Bricklet. They can also 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,” said Darren Younger, 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.”
Through Bricklet, buyers get all the benefits of living in the home, as well as all the gains from price growth of their share of the house, Younger said.
“The proposition has received strong interest and planning is underway to expand the offer for more prospective property buyers,” he told Business News Australia.
