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There is a generation of people in the UK who can comfortably afford to rent their dream home, but are unable to get a mortgage to buy it.
Wayhome developed Gradual Homeownership, a hybrid model between owning and renting, to help these people buy their dream home. With Wayhome, they could buy a home worth up to 10x income, with just a 5% deposit and no mortgage required.
Now raising on Seedrs, we sat down with founder Nigel Purves to learn more about this journey to building Wayhome.
We’d love to know about your career before Wayhome and where you first found that entrepreneurial spark.
I started my career in management consulting in the depths of the global financial crisis in 2008. I was at a company called OC&C, which is not itself that well known, but has produced a number of successful and inspiring entrepreneurs. My first line manager there was James Meekings, who went on to found Funding Circle. One of my good friends from that time is Tom Blomfield who founded GoCardless and Monzo. The founders of Moneybox, Urban Jungle, Bloom & Wild, Openrent, Trouva and others all include OC&C alumni.
When I left I taught myself to code and built a property technology platform to allow landlords to rent directly to tenants. That was my first move into entrepreneurship, and it was straight into property technology entrepreneurship.
Tell us about the business – what it is, what it aims to achieve, who you work with, how you reach customers and so on?
Homeownership in the UK is broken. The average home now costs 9 times the average income, and yet a first-time buyer can only borrow 3.5 times their income. Without a significant deposit, which let’s face it most people can’t access, a generation of hardworking people are being locked out of homeownership and the security that comes with it.
Fundamentally, Wayhome exists to help the millions of people in the UK who are locked out of owning a home, take their first steps into homeownership, with the security and freedom that comes with it.
We often talk about mortgages being a niche product – this is true for anyone under the age of 40 (and for lots of people older than 40, as it happens). In that sense, Wayhome offers a lifeline to all those who are currently excluded.
Most of our customers are families: people in their 30s and 40s, and about 50% of them have children. A lot of the people who don’t have children tell us that they don’t want to have kids while living in rented accommodation, because it’s not secure enough – the reason they want Wayhome is so they can settle down and start a family. This is when you realise the far-reaching social – and personal – impact of the housing crisis, and therefore the importance of our mission.
We reach all of our customers directly today, mainly online. We have a marketing partnership with Zoopla too. In the next phase, we’re looking to work with mortgage brokers to help all those customers of theirs who wants mortgages at more than 3.5x income with less than a 20% deposit – we know today that almost all of these people are disappointed by the offer they get from their mortgage broker, if they get one at all.
What is Wayhome and what problem are you solving?
Wayhome was created out of a simple insight that most people could afford to rent a home that they want to live in, that works for them and their family, but when it comes to buying they can’t borrow anywhere near enough to buy a similar type of home unless they have a huge deposit. And, while they continue to rent, it’s impossible to save the deposit. So they end up making sacrifices either on the size or type of home that they can buy, or the location they buy in, or more often both, or they simply continue to rent.
We thought that there had to be a better way, a way that people could afford to gradually buy the same type of home that they can afford to rent. And so Gradual Homeownership from Wayhome was born.
Gradual Homeownership is a part-buy part-rent model that allows those hardworking families who just can’t borrow enough with a traditional mortgage to get the type of home they want or need for their families. With Wayhome they can buy with just a 5% deposit, and because we buy the home together with our customers our model is completely debt free which means that it’s impossible to get into negative equity (which in today’s market is a real concern for people taking out very high LTV mortgages).
How has the business evolved since its launch? When was this?
Since launching, we’ve been helping our customers and the market (vendors, estate agents etc) learn about Wayhome as a brand new way to buy a home in the UK.
The product is exactly the same, but of course as we’re fundamentally a technology company, we’re perpetually iterating and deploying new features to help our customers on their journey, and to make our operations more efficient.
Why have you chosen this moment in time to launch your Seedrs fundraising campaign?
Having been live for a year, we decided now was the right time to raise our Series A round for the business more generally. We have several million pounds committed to that from our institutional VC investors, including our existing investors and some names that are new to our business.
We wanted to launch on Seedrs for the same reasons most companies do, I think. It’s an opportunity to reach a new set of people who we hope will become investors and then advocates for Wayhome.
I’ve actually organised phone calls with a number of people who’ve pledged investment to our round, and I’ve met some really interesting investors: from people with backgrounds in property and institutional investment, to those who want to become customers of ours as well as investors. It’s been a really rewarding experience for me as a founder.
What do you plan to do with the money you raise?
We’re fundraising so we can help more people into homeownership, and supercharge our growth.
Our focus in the next phase is customer acquisition, customer conversion, and further technology development to drive efficiency.
What do you love to do in your free time?
I have two kids under the age of 5, so alongside running a business I don’t get a huge amount of free time. Weekends tend to be spent between swimming lessons, kids birthday parties, and local playparks!
When I do get free time, I like to go to gigs – I used to play in a band myself (not a ‘proper’ one!) and once upon a time I said I was going to write the greatest album of all time by the time I was 30 (nearly 40 now, so that’s not looking so promising…)
My wife and I also like to go sailing when we can. Our dream is to sail all the way around the UK one day.
If you weren’t building Wayhome , what do you think you’d be doing?
Building something else that would be trying to have a major social impact, I expect. To my mind the most important things you can work on are the things that have the most fundamental impact on the most people’s lives. Housing, shelter, is clearly one of those. But there are others, and I think if I wasn’t in property I would be working on something along those lines.
What’s the biggest lesson you’ve learnt so far building Wayhome?
There are so many, it’s hard to choose.
I often think building a startup is one of the toughest examinations of your character you can undergo. All of your personal flaws are ruthlessly exposed, all of your dearly held opinions are shredded by objective reality, and there’s nowhere to hide when things go wrong. Ahh…sounds grim! But if you can embrace that, and genuinely use every setback as a learning opportunity, thoroughly examining what happened and updating appropriately, properly understanding how you can do better next time and, sometimes, giving yourself a break when you truly made the right call based on the information you had… well, then every bump in the road becomes an opportunity and, ultimately, you and your business will succeed.
Wayhome is a great opportunity to invest in a mission to revolutionise the way people buy homes. Check out the campaign page here.