Opening doors

Finding somewhere to live is a stressful – and expensive – experience for anyone. But the UK’s four million renters have a unique set of problems. Jamie Campbell’s open banking-driven platform Fronted is making it easier for them to move on

So, as co-founder of Fronted, he’s set out to make at least one of aspect of private tenants’ lives easier, using open banking to prise a down payment for their next home when the deposit is still tied up in the last. For many of the UK’s nearly 4.5 million households in private rented accommodation, who are, on average, moving every two to four years, having to find around £1,000 every time they relocate is at worst, impossible, and, at best, a struggle. By using open banking and financial technology to offer a credit product designed to finance deposits directly, Fronted believes it can reduce the emotional stress and time-consuming hassle that comes with moving, lending to tenants more cheaply than existing options and at lower risk to itself. As Fronted charges no early repayment fee, Campbell says it’s a solution particularly suited for those looking to bridge the payment gap between tenancies, when a new deposit may be requested before an existing one has been released. That was precisely the situation his girlfriend found herself in. “The landlord put the property on the market and they had to leave, pronto,” says Campbell. “But they needed two or three months to save up to move or borrow. I thought somebody must have fixed this because, to my mind, it’s where fintech works best: where there’s a niche customer problem, which is felt really acutely, that technology can make easy.” But, back in 2018/19, he couldn’t find any.

“There were [no-deposit] insurance schemes available, but they were really expensive, and mostly owned by estate agents,” says

Campbell. “When I started digging into the size of the market and how many people who are renting don’t have savings, I was like

‘OK, there’s something interesting here’. That started the ball rolling.”

He wasn’t new to this area of finance. While working at Bud, the UK-founded startup helping banks deliver open banking solutions, Campbell had been involved in another solution addressing problems in the rental sector.

In 2017, the Government announced the Rent Recognition

Challenge – a £2million prize fund encouraging firms to develop applications to enable tenants to record and share their rental payment data with approved lenders and credit reference agencies. Bud used the fund to build AI software that automatically detects when an individual is paying rent and prompts them to get the payments verified. These payments are gathered in a rental profile that can be shared, via open banking APIs, with banks, mortgage brokers and other relevant services, to help renters demonstrate good financial management on their way to home ownership.

“Bud created a product with Experian called Rent Recognition, which is used by a number of companies now,” says Campbell. “That audience of renters, to me, was a really interesting demographic because, generally speaking, they’ve been the least well-looked-after demographic in the UK.”

To found Fronted, Campbell teamed up with former Monzo staffer Simon Vans-Colina and Anthony Mann, who previously worked for Apple. The all-round renters app went live in February 2021.

Renters who apply to use the Fronted service are asked to link their bank account details, giving access to transaction data. Once Fronted has run the required checks

Looking for a new tenancy can be expensive and exhausting

and agreed to provide credit, the start-up sends money directly to the estate agent managing the client’s let, to be placed in one of the UK’s three deposit protection schemes. Around £5.5billion sits in these schemes right now.

“Essentially, the money is in escrow until you move out. We wanted to use a cash solution to fit into this ecosystem, but we also wanted to be really pro-renter,” says Campbell. “Generally speaking, most people come to us to get a deposit in principle first, to see how much they could get from us, then go and shop for a property, which is a really interesting behavioural change.

“Only around 20 per cent of people who come to us are renting for the first time. The vast majority are moving from one property to the next. And there’s this bridging occasion, which just doesn’t seem to be going away, where the landlord of the property that I’m exiting wants to hold on to the deposit until after they’ve done their survey, gone around to see if you’ve marked the walls, or dirtied the carpet, to see how much they think is fair to take from the deposit to fix things, while the landlord of the property that you’re moving into wants to get the deposit as soon as possible, because they want to de-risk the fact that their property is void. You’re always going to have this crossover, which means that people are always going to have to find double their deposit for this weird two-month period.

“We wanted to create something which was really cost effective for renters to borrow from us, and, if and when they get their previous deposit paid back, have the to market it was hard to engage with,” says Campbell. “There was lots of typing out usernames and passwords, and the APIs weren’t very sturdy. Now, it’s just an app-to-app redirect, so it’s a really good customer experience.”

Founded in 2019 and originally slated for a March 2020 launch, like many other business owners, Campbell and his partners were forced to put their plans on hold when the pandemic hit. “No-one could move home or view properties for about four-and-a-half months, so all the work we’d done on the product, we couldn’t test because we just didn’t have people who were in that mind-set. Getting early feedback on what we were building became really difficult. And so we hibernated the business, and then tunnelled through to greener pastures, which is kind of where we’re at right now,” says Campbell. Fronted is an ecosystem-native. It’s strategy from the get-go was to work with partners, using APIs to integrate them. “We worked with Credit Kudos on the open banking connection. They’re a credit reference agency as well, so it gives us a nice balance of working with We want an open banking provider to be the who can also help us assess first app on every the affordability and creditworthiness of our option to settle early for renter’s phone customers,” says Campbell. no fee or maybe just go that fixes renting “Businesses like Modular, and buy a couch!” who have made digital

So why hadn’t it been done before? banking services extremely easy, and our

“The reality is you probably couldn’t loan book provider, Yobota, have been build this business two or three years ago,” incredibly flexible with us. We’re pushing says Campbell. “The UK finance market ahead with our partners and seeing really has started to see quite a significant good results.” infrastructure shift. A lot of digital Initially, Fronted will generate revenue capabilities are accessible by API now, and through interest charged on deposit our business is essentially built on that advances. It then plans to extend its ethos, with interconnectivity of services product offering with additional services and finance embedded in customer to help address the myriad other problems journeys. That’s the crucial bit: trying to fit faced by renters: broken boilers, lost or no a finance proposition around something internet connection, water leaks… that people are already doing.” “We want people to get cash back on

Customers have also taken a while their rent payments; to have internet on to get comfortable with the idea of the first day they move in; give them a sharing their financial information over move-out service, so they’re not getting open banking channels. hit with huge fees. We want to help people

“When we started Bud, we knew the protect their deposit as best as possible,” power of open banking was going to have says Campbell. “We want to be the first app an impact in the UK, but when it first came on every renter’s phone that fixes renting.”