Tembo Acquires Nude Finance to Further Assist Future Homeowners

Published 6 months ago

Mortgage specialist Tembo has recently announced the acquisition of Nude Finance. This move allows Tembo to enhance its unique proposition aimed at helping the next generation of homeowners get on the property ladder sooner.

Expanding Services Through Acquisition

Through this acquisition, Tembo will now provide its customers with Nude’s award-winning Lifetime ISA, and Nude customers will gain access to Tembo’s renowned mortgage broking service from within the app. The deal, recently approved by the FCA, sees Tembo acquiring 100% of the shares in Nude Finance Limited. Jenny Watts, Tembo’s Chair, will also assume the role of Chair of the Nude Finance Board while Richard Dana, CEO of Tembo, will handle the day-to-day management of the Nude business.

Crawford Taylor will relinquish his position as Nude CEO, but will continue to provide advice to the team. As a result of the acquisition, Tembo looks forward to building on the success of 2023 and aims for profitable, double-digit monthly growth as it continues to expand in 2024.

How Tembo Helps Future Homeowners

Tembo aids customers in increasing their affordability through an innovative digital platform that focuses on assisting families and friends to support each other in getting onto the property ladder. On average, Tembo raises a customer’s affordability by £82,000 with the support of Income and Deposit Boosts, family, and shared ownership buying schemes.

Saving for a deposit is a critical step for first-time buyers. However, recent cost of living pressures have extended this process. Tembo customers typically have a deposit of £74,000, equating to 26% of the value of the home they are purchasing.

Nude Finance’s Contribution

Nude Finance has made it easier for customers to save towards their first home deposit, with its award-winning app allowing customers to set savings goals and monitor their spending. Under the Lifetime ISA rules, qualifying first-time buyers receive a £1,000 annual bonus for each £4,000 they save in a given year. This bonus significantly shortens the time it takes for first-time buyers and their families to save for a house deposit.

Nude is already assisting 20,000 customers, and the Tembo team anticipates this number to grow substantially with planned enhancements to the proposition.

The Current State of First-Time Buyers

In 2023, the number of first-time buyers declined to their lowest level in a decade, with Yorkshire Building Society estimating there were 290,000 first-time buyer transactions completing. This decline primarily results from the UK’s housing affordability crisis, with income to house price affordability now at 8.3x in England, compared to 6.7x 10 years ago.

Despite family support, saving for a deposit remains crucial for first-time buyers, with Lifetime ISAs proving to be one of the most effective ways to save for a deposit. Since their launch in 2017, Lifetime ISAs have grown in popularity, with £1.7 billion saved by over 600,000 future first-time buyers in 2022.

Looking Towards the Future

Richard Dana, Founder and CEO at Tembo, expressed delight at the acquisition and eagerness to grow and develop the business in the future. He sees a strong synergy in helping savings customers as they navigate the mortgage and homebuyer process.

Crawford Taylor, Founder and former CEO at Nude, echoed the sentiment, stating that the acquisition is a perfect fit, and he is confident in the leadership of the three talented founders.