By enabling groups of qualified home buyers to work together, StepLadder helps reduce the average time taken to raise property deposits by up to 45%, compared to saving alone, which means owning a home months or even years sooner.
Each member commits the same amount of money per month, but by pooling their resources, members stand to gain access to their total deposit amount earlier.
StepLadder members will also have access to exclusive specialist knowledge and group buying discounts throughout the property buying process.
StepLadder's CEO illustrates why time really is money, and peace of mind, for prospective first time home buyers getting that property deposit together.
One of the biggest hurdles in buying a property is saving the necessary property deposit. StepLadder helps you to raise your deposit, on average, 45% faster, than if you were to save by yourself. You’ll still be putting aside the same amount of money each month but, by collaborating with other members of your StepLadder Circles, StepLadder will help you raise your property deposit sooner.
You will also have access to our exclusive specialist knowledge and discounts throughout the property buying process.
1. When you register with StepLadder, you create a member profile. This tells us the amount that you need for your property deposit, how much you plan to put aside per month, and how long you want to do this for, amongst other qualifying details.
2. StepLadder then matches you to a circle, which is a group of members with matching characteristics, including the amount of their desired property deposit. You will receive an invitation to join this circle. In matching a member to a circle, StepLadder also carries out credit checks.
3. Before you commit to join a StepLadder circle, you and everyone else in your circle will know in advance how much you would be required to put aside each month. This is known as your fixed monthly commitment. You will also know the fixed number of months the circle will run for. This is called the fixed term of the circle. The fixed monthly commitment and the fixed term of the circle never change once you have joined a circle.
4. If you are happy to go ahead, you will then complete the signing up process, known as ‘on-boarding’, via our secure member platform. This includes setting up direct debits to pay your fixed monthly contribution and administration fee.
5. Each member makes the same fixed monthly contribution to their circle every month, for the fixed term of the circle. Every month one member of the circle will be credited their property deposit by Stepladder’s random allocation algorithm. Each member will be credited a property deposit just once during the fixed term of the circle.
6. For certain pre-determined circles (with more members participating), more than one property deposit may be credited each month. In other words, more than 1 member may be credited with a property deposit in a given month in such circles.
7. Once credited to a member, the property deposit is held in escrow by StepLadder for the member, until the member is ready to complete their home purchase. To ensure that the property deposit can only be used to complete a home purchase, the property deposit is only released to the property seller’s solicitor for that purpose, at the completion of the property purchase. At the end of the circle’s fixed term, the property deposit will be released to the member directly if the home purchase has not been completed by then.
StepLadder is a “peer-to-peer” (“P2P”) lending platform which intends to apply for FCA (the Financial Conduct Authority) authorisation in the foreseeable future. Prior to obtaining FCA authorisation StepLadder will launch its P2P lending platform and operate as an Appointed Representative of an FCA authorised firm.
Each month during the fixed term of the circle, one member of the circle is credited that month’s property deposit by Stepladder’s random allocation algorithm. Every other member of the circle lends their fixed monthly contributions to the selected member. So, that month the member credited the property deposit becomes a borrower from every other member of the circle, and every other member becomes a lender to that borrower. This way over the fixed term of the circle every member is at some time a lender to every other member, and at some time also a borrower from every other member. The only exception to this is a member who is credited the property deposit in the final month of the circle’s fixed term: such a person receives their property deposit from the reconciliation process explained in the following three paragraphs.
In the final month of the circle’s fixed term, every member (except for a member who is credited their property deposit in that final month) owes every other member an amount equal to one fixed monthly contribution. At the end of the fixed term of the circle, as every member owes every other member the same amount, all outstanding loans cancel each other out. In other words, each member has paid fixed monthly contributions equal to the property deposit that each member has received.
A member, who has not yet received their property deposit by the final month, receives repayment of all of his or her loans from the other members’ fixed monthly contribution that month, and receives and keeps the amounts repaid as his or her own property deposit.
Any property deposits still held in escrow by StepLadder are also released to the members to which they were credited (whether or not the relevant members are ready to complete their home purchase), and the circle’s fixed term comes to an end.
This is up to you.
The usual amounts range from around £500 - £1,250 per month for circles that last between 24 and 48 months. However, if your needs are different then let us know and we will try to build a circle that suits you too.
We aim to match you to a circle that can help you reach your goal while also fitting your budget. Typically, the two first figures we ask are what is the property deposit amount you are looking to use to buy a house and how much you regularly, affordable can commit each month to that goal.
Affordability is a key consideration. At StepLadder, we run three tests of affordability in matching members to a circle. We evaluate members' budgets based on disposable income both under current circumstances and with an estimate of your budget with a mortgage. For added safety, we also run a "stress test" evaluating ability to meet house payments and StepLadder fixed monthly contributions with interest rates 3% higher.
On average, you will receive your property deposit 45% quicker, and it will never take longer than if you were to save the same amount each month by yourself (excluding the administration fee)1.
The exact timing depends on when you are selected to receive your property deposit: one member is selected each month by Stepladder’s random allocation algorithm. By the end of the circle’s fixed life, every member will have received their property deposit once.
1 Calculated as 45% faster than saving the same amount per month over the same number of years, with no interest rate. Averages may vary depending on the characteristic of each circle, including administration fee.
In every circle, one member is selected each month by the random allocation algorithm to be credited the property deposit. Each member may only be credited the property deposit once. This means that every month the number of members who may be chosen by the random allocation algorithm decreases by one. As a result, the chances of being selected by the random allocation algorithm increase each month for each member that has not yet been allocated their property deposit.
Remember - each member can only receive one property deposit over the fixed term of the circle.
If you are serious about buying a property in the next few years and want a disciplined way to raise the necessary deposit 45% sooner, on average, than if you had saved by yourself, then StepLadder could be for you! To become a member of StepLadder, you must go through our on-boarding and screening processes (which include eligibility and credit checks).
No, we are waiving all fees for our first group of users.
StepLadder can give you a valuable time advantage, especially at times when property prices are rising. The sooner our members become homeowners, the sooner they can stop paying rent. Instead, their cash can go into paying the mortgage on their own property.
Additionally, many people find it very helpful to put money aside each month in a regular, disciplined way. StepLadder enables you to make a commitment to the circle for a fixed amount per month over a fixed time, helping you to stick to your goals. You will also have access to exclusive specialist knowledge and discounts throughout the property buying process, as well as joining a community of like-minded buyers.
If you’re the last member of your circle to receive your property deposit then, you will still have raised your property deposit as quickly as if you had saved on your own. Plus, you will still have had access to a range of discounts on property-buying services and professional knowledge.
By joining a StepLadder circle, you’re committing to make all of your monthly payments for the fixed term of the circle.
If you stop making your fixed monthly contribution and administration fee payments before you are credited your deposit lump sum, then you will no longer be able to take part in the monthly random allocation algorithm (or draw down your deposit if it has already been credited to you but not yet released from escrow). At the end of the circle’s fixed life, all of the payments you have made will be returned to you in full (less the administration fees explained here).
You must not stop making your fixed monthly contribution after you have been credited with your property deposit, because it is a financial commitment to the other circle members which must be repaid, just like any other loan.
However, in order to avoid you feeling the need to withdraw early from your circle, your circle host will be available privately to discuss changes in your personal circumstances and discuss available alternatives or solutions.
Yes, we expect you will get back all of the money you've put in (excluding the applicable administration fees) when either you receive your property deposit or at the end of the circle's term. StepLadder members are not covered by the UK's Financial Services Compensation Scheme (FSCS).
Your experience at a StepLadder member is designed to be independent of what any other member of your circle does. When you join, you are making a commitment for yourself to StepLadder and your fellow circle members to a set of fixed monthly contributions for a fixed period of time.
StepLadder treats all fixed monthly contributions as client money with MangoPay. This means that your money sits separate and apart from our general operating funds at MetroBank. We also have regulatory capital in escrow and wind-down funds set aside in case something happens to us.
To account for specific unexpected circumstances such as losing a job or illness, StepLadder has payment waiver cover in place. This cover is one part of StepLadder commitment to members who continue to make their fixed monthly contributions even when other members can't pay.
Your circle host can help you with any questions or concerns you may have (except specific mortgage advice), as well as more general information and resources on the home-buying process. In addition, StepLadder gives circle members access to service providers (who have been vetted and approved by StepLadder), who offer members big discounts, and are available to advise and assist you even before you make an offer on a property.
StepLadder and its hosts are not authorised by the FCA to give regulated mortgage advice, but we can introduce members to carefully selected, FCA authorised regulated mortgage advisers, whom we believe offer our members excellent prices and service.
Because of most lenders’ requirements for offering a mortgage, we expect most members to be UK residents. We are initially launching StepLadder in London, but please let us know if you are looking to buy elsewhere. If we can match you to a circle, we are happy to do so.
Yes, StepLadder can be used in parallel with any other savings scheme. As there is a cap on both the annual and total bonus amounts available under the Help to Buy ISA, StepLadder can be used in conjunction with that scheme to raise the balance of your desired property deposit.
New buyers are struggling to get on the housing ladder, and house prices have been growing further and further out of reach. Moreover, saving enough for a deposit can seem almost impossible for many people. So, we decided that a new approach is needed to help first time buyers to get onto the housing ladder sooner.
We created StepLadder to overcome these challenges, revolutionizing first-time property buying by empowering individuals to work together.
StepLadder offers a unique proposition that targets a pressing need in the UK: the struggle of first-time buyers to save up for a property deposit. Led by a senior team with decades of experience in financial services, Step-Ladder has created an innovative product that can revolutionise a major sector of the UK economy. We empower individuals, together.
The StepLadder concept is based on widely used financial arrangements which operate in many countries, from Asia to Latin America.
Matthew, the founder, studied the Brazilian versions closely over 10 years ago, for academic purposes, and more recently recognized the potential to re-purpose them for UK first-time home buyers.
StepLadder doesn’t aim to make any profit from the registration or administration fees that you pay. Instead, we introduce our members to high quality service providers, such as lending banks, surveyors, removals, insurance, etc and in return the service providers pay us fees or commissions. We believe this benefits our members because we use our members’ combined buying power to negotiate discounts for them from those service providers. We only select service providers who we believe offer an excellent standard of service, and at attractive prices.
As part of the StepLadder community, you will be connected with an online forum of like-minded first-time buyers, providing a network for sharing insights and resolving questions about the ins and outs of property-buying.
StepLadder is about creating communities, so we make sure that everyone is invited to join a suitable group following our carefully designed screening process. We welcome groups of friends to join StepLadder together, and whilst we cannot guarantee that you will be placed within the same circle, we do ensure that you are in a circle with first-time buyers who are similar to you in their financial goals.
Yes, StepLadder has an intelligent and thorough screening process for all applicants.
At the on-boarding stage, we verify every member’s identity, perform a creditworthiness assessment (in the form of obtaining the member’s credit score and credit report), and evaluate “affordability” in terms of the member’s disposable income. All details are verified with the same processes that a bank or mortgage broker would use.
We also use our screening process to identify an individual’s behavioural and personality traits, helping to create like-minded groups and turning individuals into engaged communities.
We are registered under the Data Protection Act, and we apply high standards to protect your personal data. We also comply with the FCA’s standards for financial information security. This means that your information is held securely and confidentially by StepLadder, and is never sent to third parties without your consent.
Within your circle, basic information is shared with the other members on a confidential basis. You can set your StepLadder account’s privacy to a level at which you are comfortable, meaning that you are always in control of how much personal information you share.
StepLadder is a community of members who we encourage to engage with one another, so some circles will naturally be more interactive than others. However, if you would prefer a quieter group, you can tell us your preference and we will try to match you to a circle with like-minded members.
You will not be affected by someone else dropping out from your group. You will still receive your property deposit at some time during the circle’s fixed term. This is regardless of what any other member does, as long as you continue to make your fixed monthly contributions and pay your administration fees each month for the circle’s fixed term.
Furthermore, all money that you put into the circle is guaranteed to be paid back to you by the end of the circle’s duration at the latest (minus the registration and administration fees explained above).
Each circle has insurance in place to make sure that those members who make their fixed monthly contributions and administration fees don’t lose out if other members fail to do so.
You can contact us here
Host - Your circle host is your main point of contact during your StepLadder participation. Your host is available by phone, email, and in person to help guide you successfully through your experience with StepLadder. StepLadder and its hosts are not authorised by the FCA to give regulated mortgage advice, but we can introduce members to carefully selected, FCA authorised regulated mortgage advisers, whom we believe offer our members excellent prices and service.
Circle - A group of Members with matching characteristics, including the same desired property deposit and the same fixed monthly contribution amount. A circle’s Members don’t change once the circle has started. A circle’s Members all lend to and borrow from each other for the fixed term of the circle.
Administration Fee - We are waiving all fees for our first group of users.
Fixed term of circle - Each circle is in existence for a fixed period of time, which is known to all the circle’s Members at the joining stage. During the circle’s fixed term, the Members of a circle lend to and borrow from each other. At the end of the circle’s fixed term, all the Members have repaid their loans to each other and each Member has received the property deposit once.
FCA - Financial Conduct Authority
P2P - P2P is an abbreviation of “peer-to-peer”. Peer-to-peer lending is when individuals lend to and borrow from each other directly. StepLadder is an example of peer-to-peer lending.
Property Deposit - The amount that each Member will receive once during his or her circle’s fixed terms. This is the same amount as the sum total of that Member’s fixed monthly contributions.
Fixed monthly contribution - The amount that each Member pays into the circle each month. The total amount of fixed monthly contributions paid by each Member of a circle is equal to the property deposit that is credited to Members of that circle every month.
Random allocation algorithm - The randomised system that chooses which Member is credited the property deposit each month.
Circle insurance - Insurance that makes sure that you are not affected if any other Members of your circle don’t keep up their fixed monthly contributions.
Member - a participant in a particular circle.