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Property company boss rubbishes 100% mortgage help for tenants

A company that tries to encourage people to buy a home in ‘chunks’ says few first time buyers are interested in a 100 per cent mortgage.

Earlier this week the Skipton Building Society unveiled a 100 per cent mortgage aimed at tenants with a proven rental payment record.

It’s a five-year fixed mortgage but it doesn't require a deposit and is not allowed on new build homes. 


Eligibility rules mean the applicant must be a first-time buyer and 21 or older, and needs to have been renting for at least 12 consecutive months out of the past 18 and be up-to-date on all rental payments during this period. There will also be the need to be up-to-date for at least 12 consecutive months out of the past 18 on household bills, such as council tax and electricity or gas. 

Applicants must also be up to date on other repayment commitments over the past six months such as Netflix and mobile phone repayments etc.

Now gradual home ownership operator Wayhome claims only 26 per cent of first time buyers questioned in a survey say they would have considered a 100 per cent mortgage when looking to buy a property. And 21 per cent also state that they would be prepared to pay a higher monthly mortgage repayment simply to secure a 100 per cent mortgage. 

Wayhome founder Nigel Purves says: “With interest rates climbing and house prices remaining at record highs, the nation’s beleaguered first-time buyers will no doubt be jumping for joy at the prospect of a 100 per cent mortgage. However, the devil is very much in the details and those considering one should be fully aware of just what they are signing up for before taking the plunge. 

“Not only are you unlikely to qualify for a mortgage on the house you actually want due to income limitations and lending caps, but those that do make the cut face a far higher monthly repayment cost as a result. With the market also showing signs of cooling in recent months, there’s a very real chance you could find yourself falling into negative equity at the slightest sign of a house price downturn.” 

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    Very true ,!

  • Matthew Payne

    Not to mention with rates about to start falling later in the year, be locked onto a nasty 5.49% for 5 years. The Skipton launched this product now for a reason and its not to "help" tenants.

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    Mathew, rates aren't coming down ! Inflation is too high.

  • Kristjan Byfield

    Innovation like this has been needed for years to support tenants- although I am not sure why this came with the caveat of not having a deposit. Why not lend on a tenant's rental payment track record BUT allow ANY deposit amount? Why would a bank NOT want to de-risk an asset purchase? Why not offer the usual variation in rents tied to equity/risk as well as track record? It's a step in the right direction but needs refining.
    Although I find the comment by Wayhome around negative equity 'interesting'- does that mean they are advising people generally not to buy!?

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    It's been tried before and led to the sub prime bank crash !!? Some people just don't pay bills !!!


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