It is expanding its track record product criteria to get renters back into the property ladder
Skipton Building Society has expanded its track record mortgage criteria to enable tenants who have previously been homeowners to get back onto the property ladder without the need for a deposit.
The mutual is now allowing tenants who have previously been homeowners prior to the last three years to borrow up to 100% of a property value, provided they can evidence affordability for a mortgage and show a strong track record of rental payment history.
Skipton said the expansion to the track record mortgage criteria followed the successful trial and review of the product since its launch, with it being the first lender to offer a product of this kind.
In just over four months since the launch of the 100% LTV track record mortgage, Skipton had received over £40 million in mortgage applications, with over 50% of the applicants purchasing terraced house properties and with 17% of applicants being located in Scotland alone.
“Following the successful launch of our track record mortgage for first time buyers, we have actively reviewed the product and listened to customer feedback, focusing on how we can develop it further to help more people break free from being stuck in trapped rental cycles,” Charlotte Harrison (pictured), chief executive of home financing at Skipton Building Society, said in an article announcing the criteria change.
“I’m proud to announce that from today, we’re expanding the eligibility of the product to include renters who have previously owned a home.”
Tenants aged 21 and above can borrow over 95% up to 100% loan-to-value of the five-year fixed rate product at 6.19% over a maximum term of 35 years. Previously available to first-time buyers only, the product can now be availed by those who have owned a home prior to the last three years, subject to affordability and credit score, plus evidence of a minimum of a 12-months good track record rental history.
“There are a number of reasons why people fall off the property ladder, from divorce, to relocating to a new area, and even critical illness,” Harrison continued. “However, for many, the climb back onto the property ladder can be a difficult one, leaving many trapped renting, even after previously owning their own home.
“Significant rises in house prices over recent years, on top of the associated costs that come with buying a home, means even after retaining equity from a previous property sale, securing a deposit while renting is still a blocker for those trying to get back onto the ladder.”
Harrison said Skipton launched the track record mortgage because it recognised a clear gap in the market for people who had a strong history of making rental payments over a period of time and were able to clearly evidence affordability of a mortgage.
“It’s time for a re-think on these massive barriers to home ownership, with lenders like us needing to take the lead on making mortgage solutions available to help tackle such a massive social problem,” she added. “We’ll continue to monitor, listen, and learn with our track record mortgage and seek other ways to evolve it so it’s able to help more people.”
Want to be regularly updated with mortgage news and features? Get exclusive interviews, breaking news, and industry events in your inbox – subscribe to our FREE daily newsletter. You can also follow us on Facebook, Twitter, and LinkedIn.
