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New 100% LTV mortgage aims to help tenants escape ‘rental trap’

Skipton Building Society has unveiled details of the first 100% loan-to-value mortgage launched since the 2008 financial crisis.

Aimed at renters, the lender’s Track Record Mortgage aims to help tenants onto the property ladder without a house deposit and removing the dependency on the Bank of Mum and Dad or guarantors.

Tenants who can evidence affordability for a mortgage and have a strong track record of rental payments can borrow up to 100% of a property value with a new five-year fixed rate mortgage.


Tenants can borrow over 95% up to 100% loan to value and will have to be a first-time buyer aged 21 and above.

The interest rate is 5.49% for five years over a maximum 35-year term.

Skipton said it is ensuring the monthly mortgage payment for each applicant is not more than the average of their last six months rental costs that they have paid.

For example, a tenant paying an average of £800 per month over the last six months will have a maximum monthly mortgage payment of £800.

Skipton Building Society has unveiled details of the first 100% loan-to-value mortgage launched since the 2008 financial crisis.

Charlotte Harrison, chief executive of home financing at Skipton, 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.

"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.

"This is why we’re introducing our Track Record Mortgage. It has been carefully created with the challenges generation rent is facing in mind, together with the potential risks and challenges they may encounter in the future too. In building our mortgage product with these challenges at the centre we’re ensuring considerations around negative equity have been fully taken into account.”

Commenting on the launch, Adrian Anderson of property finance brand Anderson Harris, said: “For renters wanting to get onto the property ladder with good credit history and a 12-month track record of meeting rental payments on time, this is potentially welcome news. This new product removes the stumbling block of saving for a deposit and the ever-growing reliance on the Bank of Mum and Dad to facilitate home ownership. We have already taken a number of calls from interested first time buyers.

“Whilst the launch of this product has been much-anticipated, even those with larger incomes could still struggle to purchase the homes they desire due to the restrictions in the product’s lending criteria, the wider high interest rate environment and high house prices in many areas of the UK.”

  • Matthew Payne

    A very cynical strategy from Skipton at the peak of this interest rate cycle to trap loads of FTBs onto a nasty 5 year fixed rate that will be 3% higher than they need to pay for most of that term.


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