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Tenants offered unique 100 per cent mortgage to “escape renting”

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.

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  • icon

    A great opportunity for those who wish to buy, and also a great opportunity for landlords down the line. Just as many landlords got very rich buying ex-council houses from those who exercised the right to buy at a discount. I believe the same will happen again. The old saying “you can take the person out of the council house, but you can’t take the council house out of the person”..

    This is not a reason for not introducing the scheme. I would have been very grateful for this opportunity. Just an observation.

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    Sounds a good idea, but the valuation of the property will have to be spot on given possible price falls later on. They may be onto something.

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    I think this is a great idea. I might consider drawing my tenants' attention to this.


    I said exactly the same thing. I would love to sell some of our properties to the people who live in them. Just worked it out on a mortgage calculator though and there is still no way they could afford it.

    Bill Wood

    I think I will consider it too, but at that interest rate it's unlikely to work for me.


    I would really like to sell my properties to tenants but this scheme will favour geographical areas and potentially raise prices there. The Government need to get their house in order and look at housing as a cross party level.
    In principal i applaud the Skipton, shame they can't offer better rates! Guess they want to make some money!!!

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    If you can't afford to save for a mortgage whilst renting I'm not sure yo will be able to afford the repayments - plus all the other costs of owning. I'm sure it will help a few people but at 5.49% I don't think it will be that many.


    I agree 100%.,£800 rent essentially includes buildings insurance and all repairs etc. where do they find the extra cash for these things.

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    If you wondered how long it takes people to forget what caused the last crash- apparently its 16 years. Welcome back 2007, the banks have missed you.

    I don't have an issue with helping renters get on the ladder but why are these schemes always introduced at a time when the economic storm clouds are gathering? Imagine finally buying your first property only to find yourself in negative equity for a decade.


    Have to say I was a bit surprised to see this article too.

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    It will work for some people in some parts of the country. Probably mainly the North where due to generally higher rental yields the rents are actually high enough for the numbers to stack.

    The really positive thing is that it indicates the Skipton can't be expecting the market to crash any time soon.

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    This maybe the start of a significant shift in mortgage availability for renters and I wouldn’t be surprised if Gov is behind it somehow, and may increase support for it.
    Two questions come to mind 1/ as has been mentioned ‘affordability ‘ and 2/ will landlords eventually be ‘required’ to sell to tenants to the exclusion of other bidders, I am sure Labourer would love to impose such a restriction.
    On the surface a great idea, but too early to draw any conclusions.

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    Give it a couple of yrs and the auctions will be full of repossessions again, back to 1990

  • Getting out  Landlord

    Only viable if its interest only mortgage.
    And could be a great idea for my area.
    It doesn't make it clear which type it is.
    Or have I misread this?

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    It’s a great idea why not offer it to single parent as well that would save the tax payers £23.1b Housing Benefit.
    None of my individual Tenants are paying £800.00 pm or half for the most part which are in London, good luck if you can buy here for that try the New Developments Ealing or Wembley £300k + one bedroom.
    Let them buy and repent for the next 30 years they will be well stranded, can’t move from area to area or partner to partner or follow jobs that require a move.

  • Richard LeFrak

    Not had a product from the Skipton for a while but they always had a slightly different way of lending, certainly when I bought my first house in the late 90's they were really helpful. Hopefully they still have that common sense approach.

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    We're supposed to sympathise with those "trapped in renting" who are shielded from unexpected repair bills, typically enjoying rent reductions after inflation is taken into account and can move easily without paying high legal fees, stamp duty and estate agent commission.

    Why not spare a thought for those "trapped in buying" who face mortgage payments trebling when their fixed rate mortgages need reviewed?

    Why not spare a thought for those Landlords trapped in letting who are unable to increase rents to match inflation whilst facing massive increases in all costs required to maintain and manage their properties?

    This scheme will cream off the best tenants and push up prices as market forces adjust to the fact that there are more potential buyers with the means to pay more.

    Skipton will make a lot of money out of trapping borrowers into high interest rates long after the current peak has abated.


    Very good comment , I applaud your insight.

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    I have some excellent tenants, both working, never missed a rent payment, houses immaculate. BUT their rent is subsidised by UC.

    If they were able to get a mortgage, they would do anything - extra shifts, second job etc - to afford it. But on these calculations, it is out of their reach - we are in Kent where house prices are ridiculously, painfully high.

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    Working off the £800 per month example this is a purchase of £150,000. Whilst in principle using a persons rent payment record as an allowance fir the mortgage I would guess this isn’t going to apply to many people. Also there is no factoring in once you are in a mortgage you will have far less freedom then when you rent furthermore there is no one to call when something needs replacing/ repairing. For some people renting is their first choice and that’s what the PRS was intended to accomplish

  • George Dawes

    Yes , not everyone wants to be saddled with a mortgage round their neck

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    • B L
    • 09 May 2023 11:23 AM

    "Help those trapped in renting" by trapping them paying high interest rate for 35 years. HA HA HA. Zero Fee because of hight interest rate not because of helping out. How many mortgages will be approved under this scheme? sounds like an ineffective public relations exercise.

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    Recipe for disaster

    • B L
    • 09 May 2023 11:31 AM

    Absolutely, disaster for the buyers, not the bank.

    Matthew Payne

    Exactly, avoid any 5 year fixed rate like the plague at the moment, or any fixed rate at all. Rates are going to start dropping towards the end of this year and anything north of 2.5% will be unecessarily too expensive. Better even riding out a few months on the SVR if a homemover and see what fixed deals are about in early 2024 or jump on a tracker.

  • Peter Meczes

    I think it’s worth investigating. My son and daughter both rent and would love to buy in Worcester or Hereford. So we’ll see if it’s any good. Historically that rate is not too bad.


    Historically you are right, but we are in a new era now and i'd advise getting a tracker if this is available, or a fix deal for one year only. Just my opinion though!

  • Matthew Payne

    5.49% for the next 5 years? Typical cynical lender trying to snare a load of first time buyers before rates start dropping, hence all lenders are pushing their 5 year deals at the moment. Happy days to have all those people paying 5% plus until 2028 when rates are likely to be back down to 1% or less in 2024 accorinding to the IMF. Feels a bit nasty for their CEO on the Today program this morning cooing that they care and their only motive is to help young people save money. Doesnt get much more disingenuous than that.


    I agree with your sentiment but cannot believe back to 1%, more like 3%, but nobody knows for sure.


    I agree with Andy on 3% being the rate in 2 years time with discounts available on this for low debt to equity loans.


    Well put it this way I don't think it'll be any less than 3% but I do suspect it will still be more

    Matthew Payne

    Im talking about BofE base rate not FTB borrowing rate. The latest IMF report predicts rates will fall sharply will be as low as during the pandemic in a years time, the new norm is low borrowing to drive growth, the days of 3-4% rates as the traditional monetary strategy dating back to the early 2000s are over for the foreseeable future, and they pick the UK as one of the countries in particular where this will be the case. They migth be wrong of course, but their forecasts arent usually too wide of the mark.

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    I don't agree. Interest rates will rise.


    Why will they rise? Yes we may have one more rise but inflation is falling, slowly yes but still falling. Therefore rates can start to drop away slowly surely no?

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    What about all the people who want to escape their mortgage? Very difficult for them to find a rental property!!

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    Escaping mortgage, best way is to pay off the mortgage as much as possible before selling the mortgaged property. Renting is not going to be fun if you find one to rent.

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    Andy Marshall
    When l taxed my car it had risen by 10%, to allow for inflation.that's a lot higher than interest rates. Inflation is caused by more money being printed than goods and services available. It's very difficult to get rid of because people are consuming more than they produce, and it will be severely impacted by mass immigration which will create a huge demand for goods and services.


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