Skipton Building Society launches 100% mortgage.

• This 100% mortgage is for first-time buyer applicants who are renting
• The ‘Track Record Mortgage’ comes with a 5.49% rate
• Requires good credit score plus evidence 12-months good rental history

The idea is to help first-time buyers who face a huge hurdle in saving for a deposit on a home.

Skipton advise that there are 4.6million households renting privately across England, more than double the number recorded in 2000. 80% of feel ‘trapped’ in the rental cycle, paying rents that are higher than a mortgage which then prevents them saving a deposit to buy their own home.

An Ipsos survey found nearly a third of renters spend at least 50% of their income on housing costs compared to just 17% of mortgage holders.

This Skipton ‘Track Record Mortgage’ is a five-year fixed deal and comes with a 5.49 per cent rate and a maximum term of 35 years. The mortgage is aimed at first-time buyers who currently rent and have a good track record of rental payments and pass Skipton’s affordability criteria, allowing them to borrow up to 100% of the value of the property.

Charlotte Harrison, of Skipton, says : ‘It is time for a re-think on massive barriers to home ownership. We recognise there’s a clear gap in the market for people who have a strong history of making rental payments over a period of time and can evidence affordability of a mortgage. With escalating rents and the cost-of-living squeeze … it’s making it almost impossible for people get onto the property ladder.’

This deal recognises the fact that hard-pressed first-time buyers that have met their rent and household bills over a sustained period of time should demonstrate their ability to meet a mortgage payment lower than their rent.

This is a measured approach that gives credit to tenants, as would-be buyers, for the fact that they have built up a strong track record of managing their housing costs responsibly.

Stuart Loveday

By SJ Loveday