Remember when you needed a 15% deposit to secure a home? Thankfully the mortgage market has changed over the last few years.
First, there was the 10% mortgage, then the 5% mortgage and now, the limited options that first-time buyers had have been extended to include a brand new residential product from Skipton Building Society.
A guarantor isn’t necessary and applicants need no deposit whatsoever. How does the product work? Is it too good to be true, and should you apply before it’s gone?
The average monthly rent is £2,500 in London and £1,190 in the rest of the UK
Private rental prices paid by tenants in the UK rose by 4.9% in the 12 months to March 2023, up from 4.8% in the 12 months to February 2023.
For too long, renters have been trapped paying rent without the ability to save a substantial amount on the side. Frustrated that they’re deemed capable of paying rent but not the same amount or less in a mortgage, many gave up on the idea of owning a home within the next 10 years because it was too far-fetched.
Stagnant wages, rising inflation and the spiralling cost of living haven’t made it easy for first-time buyers.
There is a great sense of urgency in finding alternative housing solutions and this news is a start for hopeful future homeowners who have been patiently waiting for things to get better.
“We’re putting our money where our mouth is”.
Skipton Building Society says that for too long deposits have held back renters from becoming homeowners. They’ll now offer eligible applicants the opportunity to get a mortgage based on their renting history.
The product has limited availability and can be withdrawn from the market at any time. If you’re hoping to qualify, ask a broker to check your eligibility now so you can secure the product.
With demand for housing soaring and eager first-time buyers waiting for a solution out of renting, requests to apply for the Skipton Building Society deal are likely to be popular.
If you’re wondering if you can apply, you’ll need a good credit history and at least 6 months of no missed payments for things like credit cards, Klarna and car finance agreements.
The start of a great shift
A record of renting history that proves the applicant can meet their financial obligations has never been considered by a lender until now.
Usually, lenders neglect to include a clean track record of rental payments in their decision and instead, they focus on deposit size, credit history and income.
However, with no deposit required for their newly launched Track Record mortgage, thousands of renters who haven’t been able to save while paying sizeable rent can now get a chance.
Skipton has announced that “this could be the start of the great shift - turning generation rent into generation homeowner”.
The first of its kind
Here’s a glimpse at the eligibility criteria for the product and rate:
Each applicant must be a first-time buyer
Each applicant must be aged 21 or over
Must have 12 months' proof of having paid rent within the last 18 months
The same people on the rental agreement used to prove payment history must be the same name on the mortgage application
Each applicant must not have missed any payments on debts or credit agreements within the last 6 months
Must also have 12 months experience of paying bills on time
The monthly mortgage payment must be equal to or less than the average of the last 6 months' rental cost
If applicants want to contribute a deposit, it must be less than 5%
Maximum loan size is £600,0000
Not available on new build flats
More information about a zero-deposit mortgage
The Skipton Building Society Track Record mortgage product has limited availability and may be withdrawn from the market at any time without notice.
Talk to a Mortgage Hut broker for the full criteria and to check your eligibility without affecting your credit score.
Don’t apply for a mortgage product without checking the criteria beforehand, as you may get rejected. A credit rejection can affect your ability to get approved for credit and loans in the future.
WhatsApp us if you have questions and someone will reply as soon as they can. We also have a quick contact form here or you can call 023 8098 0304.
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