Renters are being offered a 100 per cent mortgage by the Skipton Building Society – the first time such a product has been available since the financial crisis in 2008.

Skipton chief executive Stuart Haire says the society wants to “help those trapped in renting.”

Although some 15 other 100 per cent loans are already available the Skipton product will be unique in not requiring a guarantor and being aimed solely at tenants.

The Skipton says the new product will have these elements:

• 5-year fixed rate product at 5.49% over a max term of 35 years
• Tenants can borrow over 95% up to 100% loan to value
• Available to tenants aged 21 and above
• Available for first time buyer purchases only
• £0 Fees
• Subject to affordability and credit score, plus evidence of a minimum of a 12-months good track record rental history
• 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. For example, a tenant paying an average of £800 per month over the last six months will have a maximum monthly mortgage payment of £800.

Charlotte Harrison, CEO of Home Financing at Skipton, says: “We need to tackle the UK’s housing affordability crisis to enable more people, especially renters who are trapped in renting cycles, to buy their first home.

“People trapped in renting is one of the UK’s biggest housing challenges, having 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. 

“We recognise there’s a clear gap in the market for people who have a strong history of making rental payments over a period of time and can evidence affordability of a mortgage – but there is currently no solution for them to buy a property due to lack of savings or access to family wealth. It is time for a re-think on these massive barriers to home ownership, and we’re proud to take the lead on bringing to the market, solutions for such a massive social problem.

“This is why we’re introducing our Track Record Mortgage. It has been carefully created with the challenges generation rent is facing in mind, together with the potential risks and challenges they may encounter in the future too. In building our mortgage product with these challenges at the centre we’re ensuring considerations around negative equity have been fully taken into account.”

No-guarantor 100 per cent mortgages were commonplace before the 2008 financial crash, but then disappeared as borrowers became subject to much stricter stress testing.

The government has already hinted that it may resuscitate the Help To Buy scheme for first time buyers in a bid to boost home ownership amongst the younger population.