Former homeowners-turned-renters can now also get a helping hand back onto the property ladder as Skipton Building Society expands who can apply for its ‘zero-deposit’ mortgage.
The mutual is expanding the pool of aspiring homeowners who can apply for its Track Record mortgage, to support more ‘trapped renters.’
The home loan deal was previously launched in May, aimed at first-time buyers – and since then, Skipton says it has received more than £40million in mortgage applications.
More than half of applicants so far have purchased terraced homes and nearly a fifth of applicants have been located in Scotland, the society said.
Helping hand: Skipton has broadened out the application criteria for its Track Record mortgage
It says the move today to allow more would-be buyers to apply could potentially help people who have previously moved out of homeownership back into the rental sector.
This could be down to factors such as a divorce or needing to relocate, for example.
Skipton says people who were previously homeowners, but who have not owned a home in the past three years, can now also apply for the deal, as well as first-time buyers.
The Track Record mortgage is a five-year, fee-free, fixed-rate product with a rate of 6.19 per cent, over a maximum term of 35 years.
The average, five-year fixed mortgage on the market is also 6.19 per cent, according to Moneyfacts data – although, this is across all deposit sizes.
Charlotte Harrison, chief executive of home financing at Skipton, said: ‘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.
‘People trapped in renting is one of the UK’s biggest housing challenges that has a massive impact on the fabric of our society.
‘With escalating rents and the cost-of-living squeeze further impacting people’s ability to save for a house deposit – it’s making it almost impossible for people get onto the property ladder.
‘In expanding our lending criteria, we’ll be able to help more people to get the keys to their own home.”
When the deal launched in May, the society made it available generally for first-time buyers across Britain.
Tenants aged 21 and over may be able to take out mortgages at between 95 per cent to 100 per cent of the value of the property they want to buy.
In return, they will need to demonstrate a strong track record of paying their rent, with evidence of a minimum of 12 months of rental history.
This evidence could be provided through bank statements or a letter from a suitably registered letting agent, for example.
Skipton said that, as a responsible lender, it is ensuring the monthly mortgage payment for each applicant is not more than the average of their last six months rental costs that they have paid.
For example, a tenant paying an average of £800 per month over the last six months would have a maximum monthly mortgage payment of £800.
In the terms and conditions for the Track Record mortgage deal on its website, Skipton said that it will not lend on new-build flats but it does accept applications for new-build houses.
