23 May Unlocking homeownership for first time buyers with deposit-free mortgages, the first offer of its kind since 2008
Exciting news for aspiring homeowners! Skipton Building Society is poised to revolutionise the mortgage landscape with its innovative deposit-free mortgage offering of 5 year fixed, 5.49%, upto 100% LTV, and with no fee! With this on offer, first-time buyers can bid farewell to the frustrating challenge of balancing steep rental costs with the daunting task of saving for a substantial deposit turning generation rent into generation homeowner, and they don’t need the financial backing from family or friends.
If this is exciting news for your next move, or if you’ve already got a mortgage in principle, get in touch today, we are the leading estate agents in Colnbrook. So, if you are looking to buy or sell in the area, or you are a landlord or looking to rent in the area and have any questions, make sure to give us a call on 01753 683000 or email us.
In this blog post, we will explore the details of the new deposit-free mortgages, including Skipton’s ground-breaking product and other lenders’ existing 100% mortgages available in the market. If you’re interested in finding out if you are eligible for a deposit-free mortgage, give us a call today.
The need for deposit-free mortgages
For many first-time buyers, entering the property market has become an uphill struggle. The formidable deposit requirements of 5% or 10% or more often pose significant hurdles, particularly when combined with soaring rental expenses. According to Homelet Rental Index Data (excluding London), average UK rent prices have surged by 9.8% over the past year, reaching a staggering £1,184 per month. Meanwhile, house prices have remained persistently high, despite recent market fluctuations.
So, here comes Skipton’s deposit-free mortgage!
Recognising these challenges, Skipton Building Society has taken a proactive approach to alleviate the burden for aspiring homeowners. Their deposit-free mortgage introduces a fresh perspective by considering a borrower’s consistent rental payment history as an alternative to the traditional deposit requirement. Pending approval from financial regulators, this mortgage product has the potential to offer a 100% loan-to-value (LTV) ratio, extending a lifeline to numerous ‘trapped’ renters who have diligently fulfilled their rental obligations but struggle to accumulate a deposit.
Understanding 100% mortgages
While Skipton’s deposit-free mortgage is undeniably ground-breaking, it is worth noting that other lenders already provide similar 100% mortgages. These products typically require additional support and guarantees, often from parents or family members. Known as family-assisted mortgages, they empower first-time buyers to secure a mortgage without an upfront deposit. However, lenders usually request supplementary security, such as locked funds in a savings account or equity in the parental home, to mitigate risks. If you’re interested in finding out if you are eligible for a deposit-free mortgage, give us a call today.
Who can apply for the new deposit-free mortgage?
You might be eligible for this type of mortgage if:
- Each applicant is a first-time buyer
- Each applicant is aged 21 or over
- You have less than a 5% deposit
- Each applicant has no missed payments on debts / credit commitments (e.g. mobile phone bill) over the last 6 months
- You want to borrow up to £600,000
- You meet the household-to-household criteria
- You’re not looking to buy a new build flat
- You have proof of having paid at least 12 months’ rent in a row, during the last 18 months
- You must also have experience of paying all household bills (e.g utility bills, council tax etc.) for at least 12 months in a row, during the last 18 months.
Skipton Building Society’s track record deposit-free mortgage represents a significant leap forward, opening up new possibilities for first-time buyers. As the property market continues to evolve, it is essential for first-time buyers to explore these exciting opportunities and seek guidance from experienced estate agents, such as ourselves, who can help navigate the ever-changing landscape. If you’re interested in finding out if you are eligible for a deposit-free mortgage, give our expert team a call today to discuss your options.
Don’t let the deposit dilemma hold you back from realising your dreams of homeownership, get in touch with our office today.
If you would like to speak to someone about your property, or if you are considering buying a property, for yourself or to let or you’re in need of finding rental property, we are the leading independent estate agents in Colnbrook. So, contact us on 01753 683000 or email us. You can also follow us on Facebook, LinkedIn and Instagram.