10:21 AM, 9th May 2023, About 10 months ago 1
The first 100% LTV mortgage in the UK aimed at renters ‘trapped in the rental cycle’ has been unveiled by the Skipton Building Society.
It says the mortgage is a ‘lifeline’ to renters that will help them get onto the property ladder.
And while other lenders offer no-deposit deals that need family or friends to back them, Skipton says its new deal will not require a guarantor.
Instead, tenants interested in the mortgage must have a strong record of meeting their rent payments.
Skipton is already warning that its new five-year offering will be ‘very popular’ and believes it will sell out quickly.
Charlotte Harrison, the chief executive of Skipton’s home financing, said: “We need to tackle the UK’s housing affordability crisis to enable more people, especially renters who are trapped in renting cycles, to buy their first home.
“People trapped in renting is one of the UK’s biggest housing challenges, having a massive impact on the fabric of our society.
“With escalating rents and the cost-of-living squeeze further impacting people’s ability to save for a house deposit – it’s making it almost impossible for people get onto the property ladder.”
Ms Harrison added: “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 so can evidence affordability of a mortgage – but there is currently no solution for them to buy a property due to lack of savings or access to family wealth.
“It is time for a re-think on these massive barriers to home ownership, and we’re proud to take the lead on bringing to the market, solutions for such a massive social problem.”
However, the campaign group Generation Rent has said that the biggest obstacle for renters is finding an affordable property to buy.
The mortgage deal from Skipton for tenants is subject to affordability and credit score checks – and the tenant will need evidence of at least 12 months of good rental history.
The five-year fixed rate product is 5.49% over a maximum term of 35 years and is available to tenants over the age of 21 and only for first time buyer purchases.
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