TSB targets renters with first-time buyer mortgages

With many renters in the UK struggling to become homeowners, the TSB has unveiled first-time buyer mortgages to help.

The lender has carried out research and found that 35% of non-homeowners had no plans to purchase a property ever, and only 29% hoped to do so within five years.

The main barriers for renters buying were high property prices (45%), a lack of savings for a deposit (33%), and insufficient income to secure a mortgage (33%).

These challenges were made worse by the rising cost of renting, which increased by 6.1% for private tenants in the year to October 2023, based on ONS data.

Private renters reporting feeling anxious or worried

Renting also affected the financial well-being of many people, with 76% of private renters reporting feeling anxious or worried about their money in the last six months, compared to 46% of outright homeowners.

To help renters achieve their homeownership dreams, TSB has unveiled a new range of mortgage products designed for first-time buyers.

The mortgages allow first-time buyers to switch automatically to a lower follow-on tracker rate after the fixed term ends, reducing the total amount payable (TAP) over the mortgage term.

TSB’s head of mortgages, Deby Herring, said: “Whilst the levelling out of prices might be good for first-time buyers, it isn’t just the cost of housing holding them back.

“There is a range of other factors making it hard for them to take their first step.”