…By Henry George for TDPel Media.
Skipton Building Society has launched a mortgage deal for renters with a strong track record of paying their rent.
The “track record” mortgage offers first-time buyers in the UK between 95% to 100% of the value of the property they want to buy without the need for a deposit.
However, applicants need to show a history of paying rent for at least 12 months, which can be evidenced through bank statements or a letter from a letting agent.
The maximum mortgage term is 35 years, and the maximum amount that can be borrowed is £600,000.
Skipton will also be ensuring that buyers will not pay more on a monthly basis than their current rent.
Helping Renters Get onto the Housing Ladder
The new mortgage deal is expected to help renters who are struggling to afford a deposit for a mortgage.
It could help them to “get off the rental treadmill,” says Andrew Montlake, managing director of mortgage broker Coreco.
However, Rachel Springall, a finance expert at financial information website Moneyfacts, warned that while more support for first-time buyers who are struggling to afford a deposit is great, affordable housing is still very much in short supply.
New Generation of Home Buyers
Mr Montlake also said that the new product would help some of the new generation of homebuyers get off the rental treadmill and enjoy the security of owning their own home.
The Skipton Building Society is hoping that the mortgage will tackle the UK’s housing affordability crisis and enable more people, especially renters, to buy their first home.
The mortgage has been carefully created with the challenges faced by renters in mind, along with potential risks and challenges that they may encounter in the future.
Barriers to Home Ownership
The new deal has been introduced at a time when renters are facing a housing affordability crisis, with escalating rents and the cost-of-living squeeze making it almost impossible for people to get on to the property ladder.
The Skipton Building Society is looking to address this issue, with Charlotte Harrison, chief executive of home financing at Skipton, calling for a “rethink on these massive barriers to home ownership.”
Property website Rightmove has also reported that first-time buyers with a 15% deposit to put down face paying nearly £200 per month more for a mortgage typically than they did a year ago.
Conclusion
Skipton’s “track record” mortgage deal will provide a significant boost for renters who are looking to make the jump onto the housing ladder.
With affordable housing in short supply and a shortage of 100% LTV mortgages in the market, Skipton’s new deal could be a game-changer for first-time buyers.
The mortgage has been carefully created with the challenges faced by renters in mind and has the potential to help a new generation of homebuyers achieve the security of owning their own homes.
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