Fronted Launches Rent Deposit Loans After Pause

Fronted Officially Launches to Simplify Renting for UK Residents

Fronted, a fintech company headquartered in London, has commenced operations. The company focuses on easing the financial burdens associated with renting, including providing loans to cover deposit costs.

The founders initially paused the business in March, opting to “hibernate” it following the onset of the first lockdown and the escalating pandemic. However, following regulatory approval from the FCA and a recent decline in London rental prices, the startup is now officially open for business.

Navigating Initial Challenges

“Our initial progress was substantial, but the lockdown presented an immediate obstacle,” states Jamie Campbell, co-founder and CEO of Fronted. “The inability for individuals to relocate made it impossible to secure initial product testers, prompting us to explore alternative strategies.”

Campbell continues, “The furlough scheme provided us with valuable time and options. Ultimately, the decision to pause was straightforward and, in retrospect, proved to be the correct course of action.”

The Core Offering: Deposit Loans

Fronted was established by Jamie Campbell, Simon Vans-Colina, and Anthony Mann – all previously employed at Bud, Monzo, and Apple, respectively. Backed by Passion Capital, the company leverages open banking and other financial technologies to offer a credit product specifically designed for financing rental deposits.

The company aims to provide loans at a lower cost compared to traditional options like credit cards, payday lenders, overdrafts, and insurance-backed schemes. A key differentiator is the reduced risk associated with Fronted’s lending approach.

“The difficulties inherent in the rental process are widely recognized,” Campbell remarked previously. “Numerous issues require solutions, and we intend to address them systematically. Our initial focus is on covering rental deposits, allowing renters to repay the amount in affordable, manageable installments.”

Eligibility and Application Process

Applicants for a Fronted rental deposit loan must be U.K. citizens with a bank account demonstrating at least six months of transaction history and a minimum annual income of £12,000.

The application process involves securely linking bank account data to Fronted via open banking, enabling a comprehensive assessment of affordability beyond a standard credit score.

Fairness and Accessibility

“We believe this represents a more equitable method for determining loan eligibility,” explains Campbell. “We are launching with a commitment to fairness, and we do not automatically disqualify applicants who are receiving benefits or are currently furloughed.”

Loan Terms and Security

Fronted loans have a 12-month term and an annual interest rate of 12.5%. Importantly, there are no penalties for early repayment.

Upon loan approval, the funds are sent directly to the estate agent and placed within the U.K.’s Deposit Protection Scheme, ensuring the renter never directly handles the loan amount.

Favorable Market Conditions

Fronted highlights that 60% of renters currently lack sufficient savings to cover a deposit, creating a significant barrier to relocation. Simultaneously, rental prices in London are experiencing a decline of up to 12%, potentially allowing renters to realize substantial savings through a move.

Addressing Social Mobility

“Deposit requirements significantly hinder social mobility; the number of individuals who forgo relocation due to financial constraints is considerable,” adds Campbell. He notes that Fronted’s customer base includes both those who have already identified a property and those who are still searching.

“Prospective renters can utilize our platform to determine their potential deposit loan amount before actively searching for a property. We provide a 30-day validity period for this pre-approval, allowing them to confidently explore options knowing Fronted’s support is available.”