A lack of secure affordable housing worsens outcomes for people experiencing financial hardship and significantly increases the risk of poverty.
The 15-year partnership between The Wyatt Trust and HomeStart was born from a place of curiosity: What, if anything, could a philanthropic entity like The Wyatt Trust do to help make home ownership a possibility for South Australians on low incomes?
In 2007, The Wyatt Trust and HomeStart identified three key barriers which guided their early discussions:
1. The ability to borrow enough money to afford the home purchase price
2. The ability to save the funds for the deposit
3. The ability to pay the fees and charges associated with purchasing a home
At the time, a non-first home buyer purchasing a house for $156,678 needed an additional $8,865 to cover fees and charges. Based on these calculations, a home buyer with an annual income of $30,000 would need to save 10 per cent of their gross household income for almost three years to cover these costs, by which time housing prices (and therefore fees) would have also increased.
Wyatt and HomeStart collaborated to create a new, no interest loan product, the Wyatt Loan, for low-income customers. The loan had a five-year term and was designed to help cover the fees and charges associated with buying a home.
The partnership began in July 2008 with an initial amount of $375,000 paid to HomeStart followed by annual contributions of $350,000. Funds were ‘recycled’ to make Wyatt Loans available to additional HomeStart customers.
By the completion of the partnership in 2024, 465 loans had been made. The investment of $2,125,000 by Wyatt was leveraged to become $4.5 million.
The Wyatt Loan helped inspire a new loan product, the Starter Loan, introduced in 2020 and backed by the South Australian Government as part of the Affordable Housing Fund.
“In terms of amplified impact, being able to demonstrate the success of the Wyatt Loan gave HomeStart the evidence base that enabled us to work with the State Government to develop another new product, the Starter Loan, which has a much bigger pool of capital behind it,” explains HomeStart CEO, Andrew Mills.
“Since the introduction of the Starter Loan in 2020, we’ve now settled over 2,000 loans with the capacity to deliver around $22 million worth of funding. This equates to an impact of around 10x Wyatt’s investment. That’s a powerful outcome that The Wyatt Trust and HomeStart should be jointly proud of.”
Andrew Mills recently shared his thoughts about the success of the partnership in the following Q&A.
What do you think made the Wyatt / HomeStart partnership a success?
AM: I believe a lot of it comes down to the commonalities and shared values between the two organisations. Both organisations recognise in their mission and their role that home ownership plays such an important role in a person’s life. Both organisations are working towards creating opportunities for others.
Even through the inevitable staff changes over 15 years, both organisations and their teams have worked from a position of good faith and positive intent. We’ve always managed to work together from a position of trust to develop a smart product that was in fact a very efficient way of providing tremendously valuable financial assistance to overcome the upfront costs barrier that was keeping many people out of home ownership.
The Wyatt Loan could take years off the customer having to save and when we were able to offer them a product that can solve that problem it gives them confidence that their dream is possible.
How would you describe the success of the Wyatt Loan and its impact at the individual and systems level now that government funding has been secured for a similar product, the Starter Loan?
At an individual level, the numbers from this partnership tell a powerful story: 465 South Australians helped into home ownership who may not have otherwise been able to purchase a home of their own.
Importantly, the value of the Wyatt Loan goes beyond the product or the dollars themselves. The Wyatt Loan gave people confidence that they could overcome the barriers and that their dream of home ownership was possible. It brought what was for many a long-held dream, into reach.
At a systems level, in terms of amplified impact, being able to demonstrate the success of the Wyatt Loan program gave us the evidence base that enabled us to work with the State Government to develop another new product, the Starter Loan, which has a much bigger pool of capital behind it.
What were the most challenging aspects of this work?
The sheer demand and potential for a product like this far outweighed the ability of the capital available. There was real recognition from both organisations that there was a lot of untapped demand for this sort of assistance.
Although the Wyatt Loan was tightly controlled in terms of criteria, the trust between our two organisations meant that when applicants were just outside the income brackets or criteria, we could work together to get the benefit to suit that customer.
The structure was completely new for us so we had to learn how to run it, how to set up systems and processes, but all of those things really fed into how the stater loan came to life – it was a powerful learning process.
With house prices continuing to rise along with cost of living, where do you see the future of home ownership for low-income
earners?
I think it will remain challenging. HomeStart has been around for 35 years and in that time, we’ve helped close to 90,000 South Australians buy a home – the vast majority of whom would not have been able to get finance from a major lender.
Things have become really challenging for low-income households. The median house price in Adelaide is now $750,000-800,000 but the median purchase price for HomeStart customers is $515,000, so we’re absolutely looking for homes in the bottom quartile of the market. The tight rental market and inflation increases are also putting pressure on home buyers.
For low-income aspiring home buyers it’s very difficult to find opportunities and we continue to work hard to innovate around products that help enable people to create opportunities for themselves and their future.
Related: Closing the property ownership gap
