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

housebuyer143

Whitlane said:

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.

But if they have more than 5% they are not eligible anyway, so the property they can get is basically ruling out the majority.

My sister pays £1200 rent, the equivalent property is £400k. The cheapest 3 bed she can get is £300k... Skipton will lend £224k. The numbers will not stack for the majority.

Cheapest 2 bed in my area is about £180k. Rents £700. Still not enough to buy a place 🤷‍♂️

waseem432000

So their targeted customers are who are highly paid, rent in an expensive area but looking to buy in a cheaper area based on their max lending amount. 

housebuyer143

waseem432000 said:

So their targeted customers are who are highly paid, rent in an expensive area but looking to buy in a cheaper area based on their max lending amount. 

Yes, but can't move too far away or their employment won't be viable...

MultiFuelBurner

I haven't read the link so maybe this is flawed thought process.

When renting you usual rent up as in the rent you pay would always be a lot less than the mortgage payment on that property.

So it's not surprising renter's cannot buy the type of property they are in they will have to compromise like many first time buyers and start at the bottom of the ladder.

housebuyer143

MultiFuelBurner said:

I haven't read the link so maybe this is flawed thought process.

When renting you usual rent up as in the rent you pay would always be a lot less than the mortgage payment on that property.

So it's not surprising renter's cannot but the type of property they are in they will have to compromise like many first time buyers and start at the bottom of the ladder.

This follows a similar post I put where FTBs don't all want to compromise and want to buy a house the same size as they are used to.i don't blame them, but then they complain they can't get in the housing ladder because they don't want to start at the bottom.

Sunsaru

People keep saying that  FTB's tend not to have kids but a lot of FTB's do and according to this, if I was to try and use this scheme based on what I used to pay in rent (or even what my rent would be now), I'd only be able to afford a 1 bed flat or an over 55's 2 bed house in my local area. If I was to expend to the whole town, then I'd be able to get one of those house that had no floors, windows, bathroom.....

I'm well under 55 and I have a child. 

I'm out...

Altior

The angle looks to be appealing to those who could easily pass the affordability tests, but for some reason can't put together a deposit. It doesn't change the typical affordability multiplier ceiling. 

There may be some in that sweet spot. Though I feel that being able to put together a deposit, even a modest one, is indicative of financial discipline. 

Sarah1Mitty2

Whitlane said:

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.

So as most banks are being a lot more conservative than Skipton does that mean that your properties are no longer worth what they once were?

Forester50

As a retired banker (booo!) who has seen multiple ups and downs over the years, I great this announcement with a resigned sigh.

Here we go again....of course "this time it will be different", "mistakes have been learnt" etc etc etc. 

This is not a ciritcism of Skipton, whose undewriting policies may be very good but invetiably over time other lenders will move in, covenants and ratios relaxed and in due course there will be a "shock" that leaves the banks with loses.

One of the always fundamental rules of lending is that borrowers should have "skin in the game" so that both the lender and the borrower have a mutual interest in the mortgage being paid.

Sarah1Mitty2

Sunsaru said:

People keep saying that  FTB's tend not to have kids but a lot of FTB's do and according to this, if I was to try and use this scheme based on what I used to pay in rent (or even what my rent would be now), I'd only be able to afford a 1 bed flat or an over 55's 2 bed house in my local area. If I was to expend to the whole town, then I'd be able to get one of those house that had no floors, windows, bathroom.....

I'm well under 55 and I have a child. 

I'm out...

 Skipton own an Estate Agent with 500 branches, could that have anything to do with this move?