Lettings fintech Keyzy secures £3m to help UK first-time buyers

On a mission to “make home ownership a reality again”, Keyzy helps key workers and young professionals get on the property ladder.

Image source: Jeremy Matallah and Simon Groll/Keyzy.

After moving to the UK and discovering that despite being two young professionals with stable jobs, they couldn’t get on the property ladder, Jeremy Matallah and Simon Groll decided to tackle the problem themselves.

Now the South African and Frenchman have raised £3m to do just that, and to help thousands of others in the UK unlock home ownership too.

As the government’s “Help to buy” scheme ends at the end of March, it is unreasonable timing, as Groll told AltFithat Keyzy has completed its six-month soft launch and begun onboarding the more than 3,000 people who signed up on the pre-launch waiting list.

“We realized that a lot of people in the UK really value home ownership,” Groll said AltFi.

“It’s sort of the British version of the American dream – owning your own home – and it’s the classic expression ‘an Englishman’s home is his castle’.

“So putting together our experience and the problem that we saw for so many people, especially with housing prices always going up, we thought if we can overcome this problem ourselves, we can probably overcome it for others.”

So how does it all work?

Property fintech buys homes which it then rents out to aspiring homeowners on a rent-to-own basis, while protecting customers against rent and property price increases.

Successful applicants are given a budget to find their home, Keyzy then acquires it for them and rents it to them at a fixed rate for three to seven years.

This helps customers establish a credit history to facilitate a future mortgage application, while up to 25 percent of their rent is converted into the repurchase price of the property.

Customers can then buy the home at the original price, minus accumulated converted rent.

“In the last 12 months, the word has changed quite dramatically, and even more so for our customers,” Matallah said.

“There was a huge need for a product like ours 12 months ago when market interest rates were at 0 per cent and the economic outlook was good, but still there was this existing problem.

“But now that the market is correcting, the need for our product has increased dramatically, and we can see that in the number of applications we’re getting.”

Matallah said around the time of the mini-budget in September there was a turning point for Keyzy in terms of application numbers, which have remained high.

While rising inflation rates made it harder for banks to underwrite potential homeowners, by using open banking to assess creditworthiness, fintech is able to assess affordability more precisely.

Another unique selling point for Keyzy is that it does not require an upfront deposit, which could prevent one of its core customer groups – key workers – from getting on the property ladder.

“Our solution is very well suited to first-time buyers because the problem we solve for so many of our applicants is that they don’t have the deposit to qualify for a mortgage on day one. And then with the product, they build up savings over time, Groll said.

Aimed at young professionals who are aspiring homeowners, Keyzy found that about 50 percent of its customers ended up being key workers with a stable and reliable income who might not have the lump sum to pay up front.

Because Keyzy purchases the property on behalf of the consumer, customers can bypass this problem.

More than 100 applicants have been approved so far and Keyzy looks set to become a household name for UK customers looking to buy their first home – or castles.

Axeleo Capital and Outward VC led the funding round with participation from Seed X and existing investors Global Founders Capital and ActivumSG Ventures.