Crowdfunding website to help homebuyers find deposit

March 27, 2016 by Brendan O'Neill

Borrowers

A website set to launch in April this year will give first-time buyers the opportunity to pitch for sufficient funding to raise a deposit for their home.

A new social enterprise venture based on sites like JustGiving, will allow first-timers to crowdfund their deposit, giving them an opportunity to step onto the property ladder. Once registered on the Gifted Deposit website, people will be able to post a video to outline the reasons for needing help to get onto the property ladder. The video can be shared with friends and family, or even complete strangers. Although contributors to the fund will know that they will not receive any financial rewards, they may be rewarded in other ways, like with a meal at the new home.

According to data released by the Land Registry, the average price of a property in England was £188,270 during December 2015, which means that a 5% deposit is £9,414. Borrowers who are struggling to save the money can ask for help via the new site.

There are strict criteria for the new site, and borrowers are expected to use the money for a deposit. Credit searches will be carried out to make sure a campaign owner (the person who is asking for the money) is a genuine first-time buyer.

For many borrowers, it may be preferable to seek advice from a mortgage adviser who is CeMAP qualified and has the knowledge and experience to be able to help find an affordable mortgage.