When Matt Robinson began to develop Even, an interest-free equity loan to help first-time buyers raise a deposit, he didn’t realise quite how high the barriers to entry to the UK housing market were.
The founder, who's spent the last ten years building UK fintech GoCardless, was struck by the range of people signing up to Even’s waiting list.
“We knew there was this problem of homeownership going down and it's clear people who would have owned a home 20 or 30 years ago can't now,” Robinson told FTAdviser.
“I had this function in my head that it was just people in certain professions. That it wasn't ‘everyone’.
“But it’s been crazy since we put this proposition out there. We've got doctors, lawyers, finance professionals signing up, who have effectively been shut out of the housing market.
“This isn’t just people who are languishing in terms of income. These aren't people who aren't doing well. This is everybody. When you've got doctors coming through, it tells you there’s a problem.”
Robinson, who grew his first big venture GoCardless to process $20bn in payments annually, has now set his sights on the first-time buyer market.
Initially, the founder set up Nested to help people buy their second house by supporting them in raising the deposit before selling up.
But Robinson and his team found the first-time buyer market too loud to ignore. The founder admitted: “It's probably the product I'm most excited about ever launching.”
Mimicking the government’s now discontinued Help to Buy scheme, Even calculates a buyer’s affordability and then sets a monthly repayment for the deposit loan - which runs in tandem with their mortgage.
The repayment comes to around £50 a month, and there’s no interest rate because the loan doesn’t have to be stress-tested like a mortgage does.
Advice ‘at every step’
Other products like this already exist in the market, but Robinson argued Even’s smooth digital process, alongside its choice to employ in-house advisers, helped to discern it from rivals.
Even’s advisers work with a first-time buyer’s existing mortgage broker to ensure they receive specialist advice on the deposit loan.
“We have in-house, trained, qualified advisers because we think it's really important that if you're going to bring a new product to market, you've got to have the right people to advise on that,” Robinson explained.
“[Brokers will] also want to advise on our product, because they’ll want to know that they're giving good advice and sending clients to the right place.
“And then when they [the customer] come to talk to us, we have an in-house adviser again, who will make sure that our product is appropriate. And that's one difference of how we do things versus people in the past. People are getting the right advice at every step.”
And whilst it’s important customers know from the frontend that these are two separate loans, on the backend Even has endeavoured to tightly integrate the two so the payments are smoother.