New start-up firm Unmortgage has raised £10m ahead of its launch early next year as a new and different part-own, part-rent model.

Unmortgage, founded by CEO Ray Rafiq-Omar, is specifically aimed at generation rent who want to own their home but find it impossible to raise a mortgage because of the expense of renting.

It will allow people to buy a home with as little as a 5% deposit with the help of institutional investors. The model requires no taxpayer input, as with Help to Buy, and is also different from other shared ownership schemes where social housing providers are involved.

The ownership will be shared, with customers paying a market rent on the portion of the home that the institutions own.

Investors include Augmentum Fintech and Anthemis Exponential Ventures.

Unmortgage, which expects to employ 40 people, has already made some key hires, including Johnny Morris, who headed up research at Countrywide, while Anthony Browne, former chief executive of the British Bankers Association, has become a non-executive director.

Rafiq-Omar said: “We believe if you can afford your rent, you can afford to own.

“Unmortgage wants to help responsible people gradually own homes they could comfortably afford to rent, without the need for a mortgage or public subsidy.”

Dan Smith, managing partner of Exponential Ventures, said: “Ray and the talented Unmortgage team have deeply understood the challenges facing home ownership and the strain this places on someone’s livelihood and their long-term financial and emotional health.

“This is not a rental product nor a mortgage but something far better for first-time home owners and financial institutions alike.

“We’re delighted to support Unmortgage’s mission to enable everyone to live in the home they want.”

Regulars on EYE will recognise Rafiq-Omar as EYE’s previous proptech contributor – a post he had to step back from as his business commitment grew.