Deposit saving platform StepLadder has launched a solution for first-time buyers across the UK, after a pilot in 2018.
StepLadder groups members in ‘circles’ in which each individual contributes (through a peer-to-peer platform) an identical amount of money – ranging from £25 to £1,000 – each month. The contributions of each member of the circle in that particular month are allocated to one of the circle’s members by random draw, ensuring absolute impartiality. The process is repeated on a monthly basis, until all of the circle’s members have received their deposit money. All members will enter into a peer-to-peer loan agreement and borrow a percentage of funds apart from last member to draw their funds.
By utilising the collaborative power of group saving, 87% of StepLadder members save their deposit faster than if they were saving alone. It says it is taking inspiration from the original credit unions and building societies.
StepLadder also supports members through the home-buying process via access to specialist advice and discounts, for example conveyancers and surveyors and others.
Matthew Addison, StepLadder’s founder and CEO, said: “We’ve seen decades of rising house prices, but wages haven’t grown in line. As a result, many prospective first-time buyers have all but given up on the dream of home ownership, believing the costs to be insurmountable and the process inhospitable, StepLadder restores their faith in homeowning, providing a quicker and simpler method to save up for a deposit.
“We are the friend of the first-time buyer and look forward to helping as many people as possible this year and beyond.”