The end of the stamp duty holiday and increase to interest rates has not significantly deterred home owners from putting their properties on the market, and the housing market continues to move nicely.
To contribute to this, the market has now been opened up to a new category of buyers following Skipton Building Society’s recent announcement that it will now be able to offer a 100% mortgage, aimed at potential buyers currently in rented accommodation, meaning no deposit will be required.
The ability to offer a zero-deposit mortgage could open the door to the property market for many first-time buyers who have previously found it difficult to save a sufficient deposit whilst paying their rent.
This difficulty has now been formally recognised by Skipton Building Society, which said its new product will take rental payments into consideration.
Skipton Building Society will require certain eligibility criteria to be satisfied before granting their 100% mortgage to include, but not limited to, renters being able to prove that they have paid their rent on time consecutively for 12 months within the last 18-month period.
The monthly mortgage repayments must also be equal to, or lower than, the average of the last six months’ rental cost.
The standard affordability requirements will also need to be satisfied, amongst other criteria, but generally the introduction of this type of offer could prove invaluable for many borrowers wishing to move on from renting and become a homeowner.
The impact this will have on the property market, and whether or not other lenders will follow suit, is yet to be determined.
Date
16 May, 2023
Author
Rod Dennison
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