'Even' is inspired by Help to Buy and aims to boost first-time buyers' budget by up to £100,000. It will focus 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 offers no interest for the whole term and shares in the profit or loss at repayment, and the homeowner keeps the profit from any structural works undertaken.
It features a profit cap for Even of 2x the initial loan if paid back in 10 years, or 3x thereafter.
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.
Even plans to start offering loans by the end of 2021.
Even’s co-founder, James Turford, commented: “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.
”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 on-going 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."