Can your everyday spending – and that of family members and friends – potentially help you cobble together a home deposit faster?
That’s the aim of Homewards, a new app launched by entrepreneurs Freddie Altman and Benjamin Milsom, which rewards users with cashback from regular credit and debit card use, and others who can link to it.
Many would-be first-time buyers struggle to get onto the property ladder, with a large stumbling block being large deposits that are needed.
Banks typically ask for a 10 per cent deposit from first-time buyers – and that can be a difficult chunk of cash to save.
Homewards is an app that will allow you to save money towards buying your home. It will put cash back rewards into your chosen Lifetime ISA based on the amount you spent with its retail partners
The cashback rewards will vary. Freddie says: ‘It will be down to the retail partners’ marketing budgets and how much they will allocate to cash rewards.’
Freddie assures that Homewards will never charge customers or share their details.
‘People may have reservations about linking cards and we know there have been breaches by others in the past.
‘But we want to stress that we can’t see anything that you do besides what you do with our partners.
‘It’s purely transactional at basket level. We will know high level details so basket amount but not what’s in that basket.
‘People should rest assured that their data is safe and not out there for us to sell data as an extra revenue stream. We will only use it to improve our service.’
The business will, for now, operate through funds provided by talent investor, Entrepreneur First (EF).
Freddie adds: ‘There’s commission from retailers but our model is to pass it back to our members.
‘We aim to give as much as possible. We are not looking to make revenue off our members and we’re in it for the long game.
‘Aspiring first time buyers are really just navigating this for the first time and it’s very arduous with a lot of pitfalls.
‘Whether it be information or access to relevant angles – right now our focus is just to provide as much value for them as we can.’
However, he doesn’t rule out getting funds in the future from other sources.
He adds: ‘We will be getting further investment.
‘We don’t want to limit our options or say what our options are but crowdfunding is very interesting to us and it’s doing a social good.
‘We want people to believe in us and the mission statements. We do have good relationships with investors and venture capitalists.’
Freddie explains the reason behind the unusual domain name: ‘We’re a tech company and .io is pretty common for tech companies today
‘The .com is practically unavailable. We also have .co.uk but prefer to use the .io.’
Freddie left what he refers to as a ‘good job’ at Deloite Digital where he worked as a product and services designer for about a year.
He encourages other would-be entrepreneurs to take the plunge if they desire more of a challenge.
He says: ‘The one thing I don’t want is to live with regrets. I had a good job before and was challenged but there was a need to meet that entrepreneurial side of me.
‘Taking on risk with no structure can be daunting but there is so much support out there from the likes of EF and loads of investors even from an idea stage.
‘There is lots of safety nets out there so if the timing is right for you then go and try it out.’
Podcast: How to invest and save for your child
Ben from Homewards contacted This is Money after listening to the below podcast about saving for children.
It might not be on the top of your to-do list when you have a child, but investing and saving for them to build a tidy nest egg for when they reach adulthood is best done sooner rather than later.
In this episode of the This is Money podcast, editor Simon Lambert, assistant editor (and new parent) Lee Boyce look at the best ways to save for your children.
We discuss investment options, Junior Isas, a pension and other ways, and why ‘the hardest step is the first, but it is also the most powerful’.
Lee has a target of a £50,000 pot to build up for his new daughter ahead of her 18th birthday in 2036 – and discusses how he plans to achieve this, with a little help from Einstein’s eighth wonder of the world, compounding.