Deposit-free 100% mortgage deal aimed at helping buyers ‘trapped in rental cycles’

9 May 2023, 08:37 | Updated: 9 May 2023, 08:39

A new mortgage product has been launched aimed specifically at people who are currently renting.

The deal, which lets buyers purchase a home with no deposit, requires house hunters to have a good credit history and 12 months on on-time rent payments.

It does not need a guarantor - like most other no-deposit deals that are currently on the market.

The deal, from Skipton Mortgages, is the first to offer a 100% mortgage since the 2008 financial crash.

The deal is aimed at first-time buyers who cannot save for a deposit.

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The firm says it is to get people “trapped in rental cycles” on the property ladder for the first time.

The exact details of the deal are not yet available but according to the Times, the product will be available up to 100% of the value of the property and the deal will be fixed for two years to guard against the risk of falling into negative equity.

Most other 100% deals require a family member as a guarantor - meaning they are often only available for the well-off.

The deal is to be launched in the next few days or weeks.

In April, Stuart Haire, the Skipton group chief executive, said it was developing a mortgage deal “to enable people trapped in rental cycles – where they are prevented from being able to save for a house deposit – to access the property ladder and make a home”.

He added that there were people “who have a decent history of making rental payments over a period of time and can evidence affordability of a mortgage, yet their only barrier to becoming a homeowner is not being able to save enough for a deposit and through lack of access to the bank of mum and dad”.