A new service has launched, aiming to solve the deposit problems of first-time buyers.
Essentially, first-time buyers without enough deposit money would move into empty properties and pay an amount of money equal to rent over six months.
The amount would, however, not be seen as rent but as down-payments towards the mortgage deposit.
Uppie has been launched by George Rawlings, who works for companies headed up by industry trainer and consultant (also his father) Richard Rawlings.
The latest launch aims to match 95% mortgage pre-approved buyers with sellers of unoccupied homes.
The proposition is that in return for an asking price offer, the seller allows the buyer to move into the property between exchange of contracts and completion six months later.
During this time, instead of paying rent, the buyer pays their deposit in monthly instalments.
EYE asked if the latest offering is regulated; how it is monetising the offering; and how someone defaulting on payments can be evicted.
George Rollings told us: “We are not required to be FCA approved.
“We are not estate agents, nor do we hold any monies. We represent neither buyer nor seller.
“We do not provide valuation or marketing advice and we do not provide any negotiating services.
“Uppie is a two-sided platform whereby sellers can upload a brief description of their property, price and contact details which we then offer directly to Uppie registered member buyers.
“Buyer and seller liaise together in conjunction with our suite of documents, calculators and recommended mortgage brokers and conveyancers who have not only approved and fully understand the system – they helped us create it!
“In terms of monetisation, our mission is not focused on profits at this stage, but on solving the problem for landlords and first-time buyers, and our business model currently invites sellers to pay whatever they feel is appropriate for the use of the platform following a completed transaction, payable on completion.
“We also make referral commissions from any mortgage, conveyancing, insurance and utility referrals we might make.
“We are also about to launch our partner programme to estate and letting agents whereby, in return for a referral fee representing 15% of the commission they charge, we enable agents to offer the service to their own selected clients without charge.
“This can help them gain instructions too as it offers a parallel approach to sellers of unoccupied properties and landlords.
“Agents who have possibly struggled to sell such a property might also find it useful as an alternative approach rather than losing the instruction.
“Remember, our member buyers are not currently in the regular market.”
Rawlings knocked back suggestions put by EYE about someone moving into a seller’s empty house, who defaults on their payment and how they could then be evicted.
He said: “This service is only offered to buyers of the highest creditworthiness, so they are unlikely to default in the first instance.
“However, if they did, the consequences of failure to complete would be as dire for the buyer as any other failure to complete.
“The seller would have received an initial payment on exchange and relatively generous payments monthly thereafter which would still show a good return even if the buyer were to default during the later months.
“Under certain circumstances, in the event of the buyer defaulting, the transaction would be cancelled.”
“The seller would keep any monies paid to date and the buyer would still be liable for the full deposit.”
Asked how an occupant might evicted and under what procedure, he said: “The buyer occupies the property under an occupational licence as provided for in the Standard Conditions of Sale (5th Edition), which has much less stringent eviction procedures than an Assured Shorthold Tenancy, more akin to evicting an Airbnb guest!
“Bear in mind, the service is being offered primarily to landlords who are being squeezed by changes to taxation and mortgage legislation, and who may be keen to exit the sector.
“Many will have multiple properties on their books.
“As opposed to vacating their current tenant, and having the property sit empty while they wait for a buyer, landlords can now use the Uppie matching system to find a buyer who is already mortgage pre-approved, and is willing to pay 100% of the market price on their home. Some might even wish to use the service in respect of their existing tenants.”
Rawlings, 25, said: “I was so proud to be able to buy my first home – but it took me five years to save for the deposit I needed.
“But for many of my friends, while they could afford the mortgage they just couldn’t get their hands on the required 5% deposit.
“There had to be a way to crack the problem and, after 12-months of research, investment, technical development and some great advice from experts in the field, we created Uppie.
Co-founder Jonathan Harris, 28, who also bought his own property recently, said: “George and I have worked together for four years providing marketing software services to the estate agency sector.
“We realised that there are thousands of sellers of unoccupied properties suitable for first-time buyers; eg landlords wanting to exit the rental sector, people moving overseas, new homes builders, probate sales, etc.
“We found we could solve the problem of properties sitting empty by creating early certainty of sale while also securing the full asking price (subject to lender’s valuation) in return for occupancy during a six-month completion period.”