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At StrideUp our mission is to build a fairer and more accessible housing market and this latest partnership and commitment of funds is a major endorsement of our mission and approach. We are particularly excited to be partnering with ARA Venn who share our mission and have unparalleled experience in the sector, including the delivery of the UK government’s £3 billion Affordable Homes Guarantee Scheme to provide cost-effective long-term financing to registered providers of affordable homes.
The challenging home-buying landscape
The reality facing would-be home-owners is particularly stark at the moment with industry data* showing average first-time buyer deposits have soared 16% in two years to £53,935 while record inflation at 9% and the cost-of-living squeeze is forcing buyers to save for longer or give up. The barriers to owning a home have never been higher, causing a generation to be caught on the rental merry go round, often paying more on monthly rent than they would be on mortgage repayments. Simply put, first-time buyers are falling victim to economic conditions compounded by outdated regulation and lending restrictions employed by traditional mortgage providers. Rising house prices have outstripped incomes, meaning the average price to earnings ratio for first-time buyers is 6.9x, which is significantly above the financing attainable under a traditional mortgage*. Home-ownership is out of reach for huge swathes of the market and an alternative is desperately needed.
The StrideUp solution
Would-be homeowners only need a 10% deposit to buy in partnership with StrideUp and make one monthly payment covering repayments and rent, which enables them to effectively borrow six and a half times their income in comparison with most lenders who restrict buyers to four and a half times. They can buy up to 80% of their new home including the deposit and rent the remainder until they are ready to acquire more (in increments of their choosing). The value of the remaining 20% is frozen at the purchase price, enabling them to buy the rest at the same price even if house prices rise. However, on the 20% share, any losses from house price falls are shared with StrideUp.
Taking the pain out of home financing
StrideUp has developed a digital platform covering the end to end buying process. Getting a mortgage is often both a stressful and confusing experience for first-time buyers. This partnership with ARA Venn will allow us to further invest in our proprietary technology and to build automated solutions for customer applications, on-boarding and the approval processes. It will allow us to significantly speed up and simplify the process for our customers and help us to provide as stress-free an experience as possible in what can often be a difficult process. The partnership will also allow us to expand our reach and provide StrideUp’s digital mortgage solution to far more people in many more places. In recent months, we’ve already doubled our number of applications as more-and-more people discover the benefits of a brand new way of buying their first home.
Onwards and (Stride)Upwards
Our mission is to make home ownership more affordable and accessible to first time buyers. With our digital platform and innovative shared ownership mortgage, we’re uniquely positioned to tackle the UK’s housing affordability challenge. With so many people struggling to get on the property ladder, the timing of this announcement is particularly apt and we’re eager to start changing how people approach home ownership. Finally, we’d like to say a massive thank you to all our customers, team members, champions and partners for the help they’ve given up until this point.
Sakeeb Zaman, Co-founder and CEO of StrideUp comments “With this new funding deal, StrideUp is uniquely positioned to offer a genuine alternative. We’re excited to be partnering with investors who share our vision of building a fairer and more accessible housing market.”
Rohan Trivedi, Co-founder of StrideUp comments “We are excited to bring an innovative, scalable product to market solving a hard real-world problem for an entire generation that is priced out of home ownership. We believe this funding is an early step in making a material dent in the challenges facing first time buyers realise their aspirations.”
Gary McKenzie-Smith, Managing Partner, ARA Venn comments “Help to Buy has made a major contribution to the FTB market but it is ending and the StrideUp plan is a genuine replacement that’s much less restrictive and more flexible for buyers. We look forward to working with the company and growing their business.”