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.
“On the tech side, I think there's really important stuff you can do through the life of the loan in the background, to keep people updated on their loan balance and allow really easy repayments with no early repayment penalties,” Robinson explained.
The fintech lender has also placed a profit cap on its loans, meaning it can only make a certain amount on the loans it issues over a ten-year period.
One thing Robinson said Even brought over from GoCardless is user testing. “Our product has been 18 months in the making. Each feature has come from talking to customers. We’ve truly understood why people used the Help to Buy scheme.”
‘Substitute bank of mum and dad’
Even is yet to announce its five lending partners, but Robinson said all of the UK’s high street banks and building societies were keen to solve the problem of first-time buyers unable to access the housing market.
A recent study by Nationwide found high house prices relative to average earnings continued to make raising a deposit a significant barrier for these buyers.
If a borrower wants to pay a 20 per cent deposit, this is equivalent to 110 per cent of an average income – a record high and up from 102 per cent one year ago.
In instances where those in typically lucrative careers are still unable to gather the cash to put down a deposit, Robinson said Even will act as a “substitute bank of mum and dad” for those who can’t fall back on extra help.
Other fintech firms such as Ahauz are targeting this gap in the market, acknowledging how much of the housing market is already being underpinned by old money as more and more of the younger generation continue to rent, unable to buy a house.
According to forecasts by estate agency Savills, the bank of mum and dad will help at least half of all first-time buyers this year, with the average contribution hitting £58,000 - totalling a record £9.8bn.
“Today we find ourselves in a world where if you don't have the earnings, but you have the bank of mum and dad, then you can still make that leap. But it just perpetuates cycle after cycle [of old money],” said Robinson.
The founder, still a board member of GoCardless, intends to focus his efforts on Nested and Even for the foreseeable future.
ruby.hinchliffe@ft.com
