UK’s first neobank for first-time buyers readies for launch

The UK’s first neobank designed to help out young, first-time buyers is readying to launch.

BOMADU, which stands for the Bank of Mum and Dad United, is designed to help out the record number of young buyers who cannot turn to their parents for help.

The new neobank is helping bring a safe, fair banking solution to potential homeowners, it says, are facing the barrier of an initial home deposit.

It is particularly looking to bridge the equity wealth gap and ethnicity gap in homeownership – across England, white British households were more likely to own their own homes than all other ethnic minorities combined in 2020. 

BOMADU is a Barclays Eagle Labs startup that has also received backing from Fintech Wales, and sees itself as a viable alternative to government-backed schemes such as Shared Ownership.

It also stands apart from other startups looking to help new buyers, such as mortgage lender disruptor Proptech Generation Home, as it is specifically designed for those without additional support.

Founded and led by CEO Abi Elohim, BOMADU’s chair is former group head of capital at RBS and Tesco Bank Ian Tyler.

Tyler described BOMADU as a great example of a “people-driven business”.

“We recognise that only a very few fortunate people can realistically expect financial help from their parents when buying a home,” he said.

He acknowledged the difficulty young people face when trying to save, pay rent and deal with the rising cost of living.

“We are on a socially-driven mission to help millions of young first-time buyers fulfil their ownership dreams quickly and responsibly,” Tyler added.

The London-based digital bank has launched its first-ever crowdfunding campaign on Seedrs, and has so far raised more than £85k from 27 investors.