OnStep Homes enables working families that have been locked out from homeownership to get on the housing ladder by sharing house price risk (and return) with investors on our platform. For investors, we provide a simple, hassle-free and tax-efficient way to invest in residential property in a manner that helps prospective homebuyers instead of competing with them.

What OnStep offers to the homebuyer

The increase in house prices and the tightening of regulatory requirements related to affordability since the 2008 financial crisis have locked out a large section of middle-class working families from homeownership. The sharing of house price risk with investors on our platform ensures that these families can get on the housing ladder without taking on excessive risk. In this respect, OnStep Homes offers a similar proposition to the Help to Buy scheme and the shared ownership scheme sponsored by the UK government. The Help to Buy scheme allows the potential homeowner to borrow 6–7x their income precisely because part of that borrowing is an interest-only equity loan where the house price risk is borne by the lender. Unfortunately, because both Help to Buy and shared ownership are restricted to new-build homes, the economic benefit of the schemes flows to the builders rather than to the homeowner. OnStep Homes uses the same economic idea as these schemes but extends it to the fairly-priced existing family-homes that middle-class families would prefer to live in.

In fact, our first customers are an excellent example of a hard-working family that is locked out from the housing market today and for whom a conventional mortgage is not an option. They used to live in a shared ownership flat that was too small for the family’s needs. OnStep Homes has enabled them to buy a family home which they can eventually own fully while paying rent at the moment that is much lower than the total payment (rent + mortgage + service charge) on their shared ownership flat. Before choosing an OnStep home, they tried to get a conventional mortgage and found that a regular mortgage would only enable them to purchase a much smaller home that would not meet their needs.

If you’re interested in getting onto the housing ladder through OnStep Homes, please use our calculator to estimate the value of the home you can afford. When you are ready, you can apply online to get an Agreement in Principle.    

What OnStep offers to the investor    

As an investor on the OnStep platform, you invest in an equity loan with an inflation-linked interest payment (that compares favourably to the net rental yield on the property) as well as a principal repayment linked to the price of the house at the time of repayment. In effect, the investment is similar to the payoff you would have received if you were a buy-to-let landlord with a 70% fixed-rate mortgage. But with OnStep, the investment is hassle-free - We handle the purchase of the property, the long term tenancy agreement and arrange the insurance. The tenant assumes full repair and maintenance responsibility. Investing via OnStep is also tax-efficient - OnStep loans can be held within our Innovative Finance ISA account. As an investor on the OnStep Homes, you also help working-class families to get a crucial step on the housing ladder in a manner that is fair to them. For more details, please see the investing section.

OnStep Homes is open to investors of all types on this product (individuals, corporates, funds, insurers, pension funds etc). If you are an individual investor, please register to start investing on our platform. You can also view the details of the first property purchased on our platform before you register. If you are an institutional investor or corporate interested in investing through OnStep, please email me directly at ashwin@onstep.co and we will setup your account on your behalf.