Key risks of investing in an OnStep home

Property price fluctuation

OnStep carries all the risks of property ownership. The value of your OnStep equity loan can go down as well as up, depending on the property price. Historic performance is not a guide to future performance. A fall in the value of the property may lead to a capital loss.

Some additional risks are introduced by virtue of the fact that you may lack control over the timing of exit. The company owns the property and therefore retains the full rights to decide if and when to sell the property.

Lack of open market demand for early disposal

Your investment is repayable at the end of seven years. If however, you wish to access your investment earlier, for example if you are moving home after five years, you can attempt to sell your loan parts to other prospective tenants. This can be either on the OnStep platform, if we allow so or in the open market. Please note, you will normally not be allowed to sell your loan parts to other lenders on the OnStep secondary market.

However, there may not be anyone willing to buy your investment at a price that you deem reasonable or buy it at all. In that event you will be required to wait until the company decides to sell the property or until the end of your investment term of seven years.

Company has no other asset or income

The company you have loaned the funds to purchase the home have no other avenue to repay your loan apart from the proceeds of the sale of the house. Therefore if the house is not sold or if there is a delay in receiving the sale proceeds at the end of the loan term of seven years, your shared-equity mortgage loan may not be repaid on time.