"Sadly, 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."
Following the launch of Skipton’s 100% LTV Track Record mortgage in May, the Society is now expanding the product criteria to include renters who have previously owned a home.
The mortgage is available to tenants who feel 'trapped' in the rental cycle and are over the age of 21. The product is subject to affordability and credit score, plus evidence of a minimum of a 12-months good track record rental history.
Skipton will now allow tenants who have previously been homeowners prior to the last three years, who can evidence affordability for a mortgage and have a strong track record of rental payment history, to borrow up to 100% of a property value.
In the four months since launch, Skipton has received over £40 million in mortgage applications, with over 50% of the applicants purchasing terraced house properties and with almost 1 in 5 (17%) applicants being located in Scotland.
Skipton’s own research has found the cost-of-living crisis is the main setback for many renters, who are now saving less for a deposit than ever before, with 41% stating house prices in their area are rising too quickly for them to keep up. More than one in three (35%) are struggling to save due to increased rent – and are now having to find an extra £1,000 per year for their landlord.
Skipton's Track Record mortgage is a five-year fixed rate at 6.19% over a maximum term of 35 years. Skipton 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.
Charlotte Harrison, CEO 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.
“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.
“Sadly, 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. 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.
“We launched our Track Record mortgage because we recognised a clear gap in the market for people who have a strong history of making rental payments over a period of time and able to clearly evidence affordability of a mortgage – but there was no solution for them to buy a property due to lack of savings or access to family wealth.
“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.”
