The Guardian: UK mortgage lender [Skipton] to offer first 100% loans since 2008 crisis

gelato_cat

"Precise details of how the deal will work have yet to emerge, but according to a report in the Times, the new product will be available up to 100%, and borrowers will need to demonstrate a history of paying rent comparable to mortgage repayments for up to two years, with the deal fixed for more than two years to guard against the risk of falling into negative equity."

https://www.theguardian.com/money/2023/may/08/uk-mortgage-lender-100-loans-skipton-building-society

Simonon77

I bet they will only offer them to people who don't need a 100% mortgage. The same as a lot of interest only deals !

Sarah1Mitty2

Simonon77 said:

I bet they will only offer them to people who don't need a 100% mortgage. The same as a lot of interest only deals !

Exactly, they won`t take the chance now on people who are finding things tight, so that is probably most FTB.

waseem432000

More interested to see if government’s 95% LTV guarantee is extended again or not. I am thinking about buying first flat early next year but won’t be able to touch the 10% deposit for 90% products and my worst fears are that government may end that guarantee which will result in most lenders withdrawing 95% LTV products. 

Sarah1Mitty2

waseem432000 said:

More interested to see if government’s 95% LTV guarantee is extended again or not. I am thinking about buying first flat early next year but won’t be able to touch the 10% deposit for 90% products and my worst fears are that government may end that guarantee which will result in most lenders withdrawing 95% LTV products. 

Why would you fear that happening?

[Deleted User]

Sarah1Mitty2 said:

Simonon77 said:

I bet they will only offer them to people who don't need a 100% mortgage. The same as a lot of interest only deals !

Exactly, they won`t take the chance now on people who are finding things tight, so that is probably most FTB.

There was some talk of a government scheme to guarantee part of the loan based on having made regular on-time rent payments, to help people overcome the lack of a big deposit because they have been paying someone else's mortgage instead.

All the previous schemes this government has come up with have been rubbish. I somehow doubt this one will do much to improve the situation.

ArbitraryRandom

Suzey said:

"Precise details of how the deal will work have yet to emerge, but according to a report in the Times, the new product will be available up to 100%, and borrowers will need to demonstrate a history of paying rent comparable to mortgage repayments for up to two years, with the deal fixed for more than two years to guard against the risk of falling into negative equity."

https://www.theguardian.com/money/2023/may/08/uk-mortgage-lender-100-loans-skipton-building-society

I was just reading this. 

I completely support the idea of using rent payments as proof of affordability; I'm not sure I agree with the logic of using them in place of the whole deposit. 

waseem432000

https://www.skipton.co.uk/mortgages/track-record-mortgage 

More details on that. 

housebuyer143

The calculator will give a max affordability based on your rent but it's a very low amount they will lend. (Rent/6) If you live in a place where you can buy a house for under £149k, is the rent actually going to be £800? Not near me if isn't.


I'm sure Skipton will be very selective for this but it seems to be the beginning of something that maybe shouldn't have been allowed to come back.

Whitlane

I don’t think they’ll get much uptake.

I’ve put the rents in that I charge my tenants and compared it to the approximate value of my properties. The amount Skipton are prepared to lend is way short on all of my properties.  The buyer would therefore need to find a large deposit anyway.

daveyjp

This appears to be an offer to get Skipton some headlines and enquiries, but on their standard 35 year term the maths just about work.

Just looked locally at a typical first time buyer property and rents are £750-800 a month.  Similar properties sell for £130-150k.