Simon Groll and Jeremy Matallah / Keyzy
Getting on the housing ladder remains one of the biggest saving goals for Brits despite being a distant goal for many.
House prices have risen significantly over the past few decades, outpacing wage growth and the cost of living crisis continues, making it harder to save enough money for a down payment and harder to borrow enough for a mortgage.
In London, where the average home costs £534,000, it is estimated to take up to 14 years for buyers to save up a 10% deposit.
Keyzy is trying to shorten that timeframe with its rent-to-own model, and has just secured £130m in funding from Crayon Partners to continue doing so.
The UK-based fintech platform offers its customers fixed rate two year leases where up to 100% of their rental payments each month converts into a deposit. There’s no upfront deposit and each month the rent goes towards decreasing the future price of purchasing the home from Keyzy.
“People want certainty over what their lives will look like,” Keyzy co-founder Simon Groll tells Pathfounders. “We hear horror stories from people who are asked to move every 12 months, who have had very substantial increases in their rent every year. We understand that people want to put down roots and when you have to wait around 14 years to save for a deposit for a home in London, it's just very challenging for people to see how they get onto the property ladder.”
Keyzy currently has properties across the UK but the PropCo funding from Crayon Partners — which has just raised its first fund — will be used solely for homes in London. The aim is to purchase more than 250 homes for first-time buyers in the next 18 months, focusing on key workers and young professionals.
“There's a more concentrated level of demand and there is a more acute challenge around home affordability [in London],” Groll says.
The startup last raised funds in 2023 when it secured £3m in seed funding in a round led by Outward VC and Axeleo Capital. Now, with Crayon, it will be able to scale much more quickly, taking on dozens of properties at once rather than one at a time, according to Groll.
Groll would not disclose the number of people currently in Keyzy homes, but he said more than 10,000 people have applied, and capital has restrained them from being able to meet that demand so far.
Six years on from launch, the company’s first residents are now “graduating” to buying the homes back from Keyzy, the model starting to work in full circle.
Keyzy has also launched a homeownership app, Klink, as a standalone financial wellness app to help people build a bespoke home buying plan which has more than 10,000 users including Keyzy users, applicants and the general public.
“We know people want to buy homes, but sometimes they just don't know how, and [with] the level of misinformation and TikTok influencers, it's really hard for people who aren't very, very involved in the industry to understand what the real barriers are,” Groll says. “And so we've committed a lot of resources helping people understand those things.”