Skipton's Deposit-Free Mortgage: A Game Changer for Renters?

The surge in rental costs (which according to new figures by Zoopla, renting a newly let property is on average £270 per month more expensive than at the end of the coronavirus pandemic), has made it increasingly difficult for many to save for a deposit, highlighting the urgent need for innovative solutions to make homeownership more accessible.

Unlike other no-deposit deals that require financial backing from family or friends, Skipton’s mortgage only requires proof of 12 months of on-time rental payments and a good credit history. This innovative product has been designed to help renters transition into homeowners without the need for a hefty deposit, a common barrier for many aspiring homeowners.

Scott Richford​​​​, Mortgage and Protection Adviser at Mortgage Advice Bureau, said: “This scheme has enabled proven good payers of rent to purchase a property before having to wait to save up the usual 5% deposit needed on a new build property. The rental payments made over the last 12 months are used to base the level of mortgage available on this scheme, so please speak to your new build mortgage specialist who will be able to work this out for you and let you know the mortgage payments for this option moving forward.

“So, for example someone paying £950 per month rent over the last 12 months could borrow £220,000 without a deposit and that would cost £1,139 per month over a 40-year term, enabling them to get on the ladder soon rather than later. This assumes the clients do meet standard affordability rules with the lender as they also do check of affordability based on the clients’ income and outgoings and credit rating. This deal wouldn’t have any arrangement or valuation fee to pay upfront.”*

With rapidly rising rents and the closure of the government’s Help to Buy scheme, first-time buyers face significant challenges in entering the housing market, this scheme could provide a much-needed alternative, recognizing the financial struggles of renters and offering a viable path to homeownership.

As a housebuilder, we understand the importance of creating opportunities for first-time buyers. Initiatives like Skipton’s deposit-free mortgage are essential in making homeownership more accessible. We are committed to supporting such innovative solutions and continuing to build homes that meet the needs of all buyers.

If you’re thinking about buying hone and want to know more, then feel free to get in touch with one of our Sales Advisors and they’ll be happy to help. 

*Your home may be repossessed if you don’t keep up repayments on your mortgage.