Skipton launches UK's first no-deposit mortgage

Renters struggling to save for a deposit can now get a 100% mortgage from Skipton Building Society, in a major boost for first time buyers.

The deal is available for applicants with proof of having paid rent for 12 months in a row within the last year and a half, and who have passed a credit and affordability check.

Unlike other first time buyer deals on the market, it does not require family or friends to act as guarantors and is available on new build homes but not apartments.

Simon Pendlebury, Dandara’s Managing Director, said: “This could be very good news for renters, many of whom feel it is unfair that while they have comfortably paid rents for many years, yet they are being turned down for mortgages because they don’t have big enough deposits and are considered a financial risk.

“We are excited to see if this is the beginning of a change in the way first time buyers are viewed by mortgage lenders and a chance for young people to leave generation rent for good.”

However, he cautions that there are a number of strict criteria to be met first and that buyers should always take advice from an independent mortgage advisor before signing up for any deal, as it might not be the most competitive rate on the market.

To be eligible buyers for the non-deposit mortgage applicants must:

·       Be a first-time buyer and 21 years of age and above

·       Have no missed payments on debt credit commitments (even for mobile phone rentals or Netflix subscriptions) in the last six months

·       Purchase a property worth no more than £600,000

·       Have proof of having paid rent for at least 12 months in a row, within the last 18 months.

·       Have 12 months experience paying all household bills within the last 18 months.

·       Take out their loan over a max term of 35 years

·       Borrow a maximum of 4.49x LTI (Loan to Income)

·       Prove that the monthly mortgage payment must be equal or lower than the average of the last 6 months rental cost – e.g. if the average rent over the last 6 months is £800, the mortgage payment must be £800 or lower (example below)

The deal comes with a five-year fixed rate of 5.49% - to find out more go to Find out more