Founder of tech ‘unicorn’ GoCardless aims to solve the affordability trap for first-time buyers

Matt Robinson, founder of GoCardless and Nested estate agents, has turned his attention to one of the biggest challenges in the property industry – getting onto the housing ladder.

Homeownership is increasingly out of reach for aspiring first-time buyers. In 1991, 67% of 25-34-year-olds owned the home they lived in. By 2020 this number had fallen to 41%. In just one generation, there are two million fewer homeowners aged 25-35 in the UK.

Further, a massive £10bn is lent to first-time buyers from the “bank of mum and dad” each year. In fact, if the Bank of Mum and Dad were actually a bank it would be one of the top ten mortgage lenders in the UK. But not everybody is lucky enough to access those funds, so Robinson aims to solve this problem head-on.

Even is an interest-free equity loan for first-time buyers, boosting their budget by up to £100,000 in order to get on the property ladder sooner. Even is inspired by Help-to-Buy but instead focuses on the pre-owned market which represents 85% of first-time purchases. The loan aims to solve the problem of both low deposit and loan-to-income ratios often faced by first-time buyers.

Instead of charging interest, Even shares the increase, or decrease, in property value when the customer pays back the loan. The share is calculated based on the initial contribution of both parties. For example, a contribution of £10,000 by the buyer and £10,000 from Even means any subsequent profit is split 50/50 on repayment.

Even’s co-founder James Turford says their main point of differentiation is the customer-friendly terms of the loan. According to Turford, also a co-founder at Nested, ‘fairness is at the heart of the product’:

“We spent two years researching the pain points for those struggling to get on the property ladder. What came out loud and clear were two things: People are tired of being stuck in the rent trap, paying off their landlord’s mortgage while being unable to save because of constantly rising rents. And they want a fair alternative to the state run Help-to-Buy scheme and which is being phased out in any case”, says James Turford, Co-Founder of Even.

”Even wants to get people onto the property ladder, but most of all, do it fairly. That’s why, as well as sharing the profit when the property is sold and charging no ongoing interest, we will also share the loss if the property has gone down in value when you sell. In addition, we have a profit cap on our share, so the owner stands to benefit significantly more than us from big rises in value”, he adds.

Even offers a slew of features designed to be fair for customers:

Nested, the parent company of Even, has raised £45m in funding to date, and aims to use the funds to grow Even as a viable alternative to Help-to-Buy for those who want non-new builds. With a growing team covering customer service, finance, mortgage advisors and underwriting, Even plans to start offering loans by the end of 2021.