A new app that aims to improve social mobility by lending rental deposits has launched after a false start last year, despite being led by some of tech’s biggest names.
Fronted uses open banking and other financial technology and aims to finance deposits directly and more cheaply than existing options, such as credit cards, pay-day lenders and overdrafts, or insurance-backed membership schemes.
The fintech also promises that its offer is lower risk. Once a rental loan is agreed, the money is sent directly to the estate agent to be put in the deposit protection scheme – and tenants pay back the cash in manageable amounts.
Last March, co-founder and CEO Jamie Campbell (above, right) who made his name at Open Banking platform Bud decided to hibernate the new business as the pandemic took hold.
With rents falling in London, it’s now the right time for the start-up to officially launch as 60% of all renters have no savings and aren’t in a great position to move, says Campbell.
The other two co-founders are former Monzo high flier Simon Vans-Colina (above, centre) and Anthony Mann (left), who used to work at Apple.
“Deposits are a huge impediment to social mobility,” he explains. “People who haven’t found a place, they are coming to us to see what deposit they could get and then going to find a property.
“For those people, we give them a maximum which is valid for 30 days so they can shop around knowing they have Fronted in their back pocket.”
To apply for a rental deposit loan, tenants need to be a UK citizen, have a bank account with more than six months of transaction data and a minimum income of £12,000.
The app then checks affordability beyond a simple credit score; those on benefits or furloughed will also be assessed. Loans last 12 months, carry a 12.5% interest rate and no early repayment fees.