Skipton launches deposit-free mortgage aimed at renters

A deposit-free owe specifically aimed astatine radical presently renting has been launched by a UK gathering society.

While a fistful of different no-deposit deals are available, they each request the fiscal backing of household oregon friends.

Skipton Building Society says portion its woody requires 12 months of on-time rental payments and a bully recognition history, it does not request a guarantor.

However, astatine 5.49% the involvement complaint is much costly than the mean five-year hole of 5%.

Generation Rent, which campaigns connected behalf of backstage renters, says the shortage of affordable properties wrong the fund of first-time buyers is inactive the main stumbling artifact for those struggling to get connected the spot ladder.

"It's not needfully going to assistance each the radical who are looking to bargain a first-time location if determination aren't much houses disposable to buy," says Will Barber Taylor from Generation Rent.

Currently determination are 15 different zero-deposit products connected the market, according to fiscal information steadfast Moneyfacts, accounting for conscionable nether 0.3% of the UK market.

First-time buyers are facing an uphill battle. Rapidly rising rents person made redeeming for a deposit progressively difficult, astatine the aforesaid clip that the government's flagship Help to Buy scheme, aimed astatine helping first-time buyers, is nary longer open.

The Skipton, which is the UK's 4th biggest gathering society, says it recognised a "gap successful the market".

Stuart Haire, the society's main enforcement told the BBC that "until present determination has been nary solution for them [renters] to bargain a spot owed to a deficiency of savings oregon entree to household wealth".

David is renting with his spouse and caller babe successful North Yorkshire. "It's getting that deposit unneurotic that's truly hard with rent prices," admits David.

"If I tin beryllium I've been paying rent for the past 10 years of my beingness wherefore can't I person a mortgage."

The government's Help to Buy strategy saw the Treasury lending homebuyers betwixt 5% and 20% of the outgo of a newly-built home, and up to 40% successful London.

The strategy closed to caller applicants successful October 2022, but determination are rumours that thing on akin lines could beryllium re-introduced.

But a emergence successful zero-deposit mortgages whitethorn not beryllium welcomed by everyone, arsenic riskier mortgages with a precocious indebtedness to worth were a basal origin of the 2008 fiscal crash.

Mortgage adept Andrew Montlake says past lenders were conscionable funny successful measurement alternatively than quality.

"The satellite is precise antithetic now," helium says, and adds that his sentiment has changed implicit the past 15 years, arsenic agelong arsenic the 100% indebtedness worth mortgages are "underwritten sensibly".

Would a deposit-free owe assistance you? Are determination capable affordable homes wherever you live? Share your experiences by emailing haveyoursay@bbc.co.uk.

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