The founders of Nested are launching an equity loan product similar to Help to Buy with plans to start lending by the end of this year.
Unlike the government-run scheme, buyers will not be restricted to new builds.
Loans will be interest-free with the lender instead benefitting from capital appreciation.
The lender, called Even, has been set up by the founders of the online estate agency Nested, Matt Robinson and James Turford.
Robinson also previously launched the payment fintech GoCardless.
Turford and Robinson say they are aiming to solve two of the biggest barriers for first-time buyers: raising a deposit and loan-to-income constraints.
Even can lend up to two times a buyer’s deposit capped at a maximum of £100,000.
It will share in either the profit or the loss depending on what happens to house prices.
A profit cap of 2x the initial loan applies if the borrower repays the sum within 10 years, or 3x the loan if the borrower takes longer.
There are no early repayment charges and the borrower keeps the profit from any structural works undertaken.
There is a maximum term of 40 years.
Nested is the parent company of Even and has raised £45m in funding to date.
The lender says that it will be focussed on pre-owned properties which represent 85% of first-time purchases.
The profit or loss that is shared depends on the initial contribution of both parties.
For example, a contribution of £10,000 by the buyer and £10,000 from Even means any subsequent profit is split 50/50 on repayment.
Turford says: “We spent two years researching the pain points for those struggling to get on the property ladder.
What came out loud and clear were two things: People are tired of being stuck in the rent trap, paying off their landlord’s mortgage while being unable to save because of constantly rising rents.
“And they want a fair alternative to the state run Help to Buy scheme, which is being phased out in any case.
“Even wants to get people onto the property ladder, but most of all, do it fairly.
“That’s why, as well as sharing the profit when the property is sold and charging no ongoing interest, we will also share the loss if the property has gone down in value when you sell.
“In addition, we have a profit cap on our share, so the owner stands to benefit significantly more than us from big rises in value.”