In our current housing situation, it is a miracle that any first-time buyers can even reach for the bottom rung of the property ladder. StrideUp is here to help. Last year Sakeeb Zaman and Rohan Trivedi teamed up to help make shared home ownership more readily available within the private housing sector.
In the summer of this year, the company launched their service, allowing you to purchase outright just a portion of your home, whilst continuing to rent the remainder. It will greatly benefit those who have some money spare but who find that mortgaging or re-mortgaging their home to be out of reach in their current predicament.
What is Shared Ownership in Simple Terms?
Shared ownership is where your landlord and you each part own your home, and whenever you have spare money you can purchase a little segment more. As you increase your stake in the property, the rent you pay each month will decrease. Over time you will be able to either purchase the entire home outright or attain a mortgage to pay off the rest of the property. This seems to be one of the only options out there for young professionals with house prices on average being 7.6 times the average annual salary, whilst conventional mortgages are around 3.6 times the salary.
Rohan Trivedi says, “Our typical customers are first time buyers in their mid/late 20s to late 30s. They have spent five-plus years renting and want to get on to the property ladder, but traditional mortgage finance is unable to bridge the gap between where they want to live and what they can buy.”
What is StrideUp all about?
Property ownership in the current market seems to be an all or nothing venture, with renting and owning nothing or buying a home using a mortgage and owning the entire property being the only two options. StrideUp provides a middle ground, allowing people to start by owning 10% of their home and working up.
StrideUp is very similar in nature to the government’s Shared Ownership schemes which have proven very favourable to users. The only issue with this is that they are severely constrained by supply. Trivedi believes that StrideUp offers a significantly more flexible product, allowing buyers to pick any property rather than meet the criteria of the government’s scheme, with no need to sit on lengthy waiting lists.
How it works
On the StrideUp website, a prospective buyer signs up and enters specific details about their finances and location. The algorithm produces a maximum property value that the homebuyer should target. With this budget in mind, a homebuyer identifies a property on the open market that fits your needs. They then submit the property to StrideUp for approval.
StrideUp determines what a fair offer on the property would be to buy the property. StrideUp will support the buyer throughout the entire procedure, supplying surveyors or arranging for solicitors as and when they are needed.
The start-up makes money from the investors who are helping to purchase these properties. These investors will retain the rents and any future increase in the property’s value. StrideUp gets a nominal fee as the go-between.
Latest Round of Seed Funding
To help fund this venture StrideUp has completed one round of seed funding, winning £1.6m in equity and debt financing led by Picus Capital. Picus is a leading European venture capital fund, hoping to improve StrideUp and the housing market for first time buyers in the UK. It is likely as the company grows secondary and tertiary rounds of investment will be carried out to match the demand.