MSE News: Skipton launches UK's first 100% no deposit mortgage since 2008

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Renters struggling to save for a deposit can now get a 100% mortgage from Skipton Building Society. It's the first no-deposit deal – that doesn't require a guarantor's backing – to launch in the UK since 2008, and MoneySavingExpert.com founder Martin Lewis says it could be a "sensible" option for some. We explain who can get it, how it works and the risks you need to watch out for below.

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Skipton launches UK's first 100% no deposit mortgage since 2008 – which Martin Lewis says could be a 'sensible' option for some renters'

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  • Koalah
    Koalah Posts: 13 Forumite
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    Curious to see if anyone actually gets approved. I’ve been paying my rent on current place for over 9 years, never been late. For last 4 years have used CreditLadder to report the rent payment. Been keeping an eye on my credit score. Saving for deposit been difficult as rent has nearly doubled.
    I’ve been looking to relocate as work from home, and finding a rental is proving challenging due to current market. So I applied to Skipton today. First step said I could borrow £306k. I’d found a place for £280k, so payments were several hundred less than current rent. Experian credit score near perfect (only a few points off 999).
    But was rejected when they did soft search. Looked at Experian (who it said they used), no issues, excellent credit. Rang them and they’ve said ‘I failed their internal scorecard and could provide no further details why, and sorry they were unable to provide a mortgage’.
    so based on everything they published and press release, why was I rejected? My payments would have been 25% of my salary, and considerably less than my current rent. And I can’t find any cheaper rentals, even with moving as no rentals in that area and dozens competing for them. But plenty of homes to buy for sale.
  • housebuyer143
    housebuyer143 Posts: 3,426 Forumite
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    Koalah said:
    Curious to see if anyone actually gets approved. I’ve been paying my rent on current place for over 9 years, never been late. For last 4 years have used CreditLadder to report the rent payment. Been keeping an eye on my credit score. Saving for deposit been difficult as rent has nearly doubled.
    I’ve been looking to relocate as work from home, and finding a rental is proving challenging due to current market. So I applied to Skipton today. First step said I could borrow £306k. I’d found a place for £280k, so payments were several hundred less than current rent. Experian credit score near perfect (only a few points off 999).
    But was rejected when they did soft search. Looked at Experian (who it said they used), no issues, excellent credit. Rang them and they’ve said ‘I failed their internal scorecard and could provide no further details why, and sorry they were unable to provide a mortgage’.
    so based on everything they published and press release, why was I rejected? My payments would have been 25% of my salary, and considerably less than my current rent. And I can’t find any cheaper rentals, even with moving as no rentals in that area and dozens competing for them. But plenty of homes to buy for sale.
    That's terrible! I wonder who they are accepting then if not someone with a perfect credit rating 😔
  • No19v87
    No19v87 Posts: 29 Forumite
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    Koalah said:
    Curious to see if anyone actually gets approved. I’ve been paying my rent on current place for over 9 years, never been late. For last 4 years have used CreditLadder to report the rent payment. Been keeping an eye on my credit score. Saving for deposit been difficult as rent has nearly doubled.
    I’ve been looking to relocate as work from home, and finding a rental is proving challenging due to current market. So I applied to Skipton today. First step said I could borrow £306k. I’d found a place for £280k, so payments were several hundred less than current rent. Experian credit score near perfect (only a few points off 999).
    But was rejected when they did soft search. Looked at Experian (who it said they used), no issues, excellent credit. Rang them and they’ve said ‘I failed their internal scorecard and could provide no further details why, and sorry they were unable to provide a mortgage’.
    so based on everything they published and press release, why was I rejected? My payments would have been 25% of my salary, and considerably less than my current rent. And I can’t find any cheaper rentals, even with moving as no rentals in that area and dozens competing for them. But plenty of homes to buy for sale.
    Do you have any active credit agreements?
  • Koalah
    Koalah Posts: 13 Forumite
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    No19v87 said:
    Koalah said:
    Curious to see if anyone actually gets approved. I’ve been paying my rent on current place for over 9 years, never been late. For last 4 years have used CreditLadder to report the rent payment. Been keeping an eye on my credit score. Saving for deposit been difficult as rent has nearly doubled.
    I’ve been looking to relocate as work from home, and finding a rental is proving challenging due to current market. So I applied to Skipton today. First step said I could borrow £306k. I’d found a place for £280k, so payments were several hundred less than current rent. Experian credit score near perfect (only a few points off 999).
    But was rejected when they did soft search. Looked at Experian (who it said they used), no issues, excellent credit. Rang them and they’ve said ‘I failed their internal scorecard and could provide no further details why, and sorry they were unable to provide a mortgage’.
    so based on everything they published and press release, why was I rejected? My payments would have been 25% of my salary, and considerably less than my current rent. And I can’t find any cheaper rentals, even with moving as no rentals in that area and dozens competing for them. But plenty of homes to buy for sale.
    Do you have any active credit agreements?
    All paid off except for car. I’ve been building my credit report for several years - borrowing and paying off, credit cards with low balances but high limits etc - all the things advised to do.
  • MalMonroe
    MalMonroe Posts: 5,783 Forumite
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    You also have to be a first time buyer. I was looking into this earlier and although I'm now renting, I've owned property in the past so I'm out. But having thought about it, 100% does seem a bit scary. 

    I saw some man from Skipton being interviewed on the news and although the presenter asked him about the last time 100% mortgages were available and the number of people who found themselves in great financial difficulty following taking them out, he seemed to think that Skipton would be on hand to help and guide everyone who had one. Presenter remained sceptical and so do I. 

    Although it seems like a great deal, it's not open to every person who rents. 

    If I were you, though, OP, I'd clear your credit card balances every month, rather than maintaining low balances because that's something that many lenders don't like. Also would try to clear the car finance. Plus, you are aware that the credit scores you see are never seen by anyone else? Lenders have their own credit scoring systems.

    When lenders decline to take you on, they usually advise you to look at your credit reports so I'd just check yours with the main agencies - Equifax, Experian and TransUnion to ensure that they are up to date and accurate.

    I think this is one of those things that seems to be a bit too good to be true, except for the chosen few who manage to fit the tight criteria. I may be wrong but I'm excluded anyway so won't even be applying. Oh well, it was good while the thought lasted. 
    Please note - taken from the Forum Rules and amended for my own personal use (with thanks) : It is up to you to investigate, check, double-check and check yet again before you make any decisions or take any action based on any information you glean from any of my posts. Although I do carry out careful research before posting and never intend to mislead or supply out-of-date or incorrect information, please do not rely 100% on what you are reading. Verify everything in order to protect yourself as you are responsible for any action you consequently take.
  • housebuyer143
    housebuyer143 Posts: 3,426 Forumite
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    Koalah said:
    No19v87 said:
    Koalah said:
    Curious to see if anyone actually gets approved. I’ve been paying my rent on current place for over 9 years, never been late. For last 4 years have used CreditLadder to report the rent payment. Been keeping an eye on my credit score. Saving for deposit been difficult as rent has nearly doubled.
    I’ve been looking to relocate as work from home, and finding a rental is proving challenging due to current market. So I applied to Skipton today. First step said I could borrow £306k. I’d found a place for £280k, so payments were several hundred less than current rent. Experian credit score near perfect (only a few points off 999).
    But was rejected when they did soft search. Looked at Experian (who it said they used), no issues, excellent credit. Rang them and they’ve said ‘I failed their internal scorecard and could provide no further details why, and sorry they were unable to provide a mortgage’.
    so based on everything they published and press release, why was I rejected? My payments would have been 25% of my salary, and considerably less than my current rent. And I can’t find any cheaper rentals, even with moving as no rentals in that area and dozens competing for them. But plenty of homes to buy for sale.
    Do you have any active credit agreements?
    All paid off except for car. I’ve been building my credit report for several years - borrowing and paying off, credit cards with low balances but high limits etc - all the things advised to do.
    Unless the cards are 0% they should be cleared every month. Having low balances on them they you are paying interest on is not a good idea and might be a red flag to a lender.
  • Koalah
    Koalah Posts: 13 Forumite
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    Koalah said:
    No19v87 said:
    Koalah said:
    Curious to see if anyone actually gets approved. I’ve been paying my rent on current place for over 9 years, never been late. For last 4 years have used CreditLadder to report the rent payment. Been keeping an eye on my credit score. Saving for deposit been difficult as rent has nearly doubled.
    I’ve been looking to relocate as work from home, and finding a rental is proving challenging due to current market. So I applied to Skipton today. First step said I could borrow £306k. I’d found a place for £280k, so payments were several hundred less than current rent. Experian credit score near perfect (only a few points off 999).
    But was rejected when they did soft search. Looked at Experian (who it said they used), no issues, excellent credit. Rang them and they’ve said ‘I failed their internal scorecard and could provide no further details why, and sorry they were unable to provide a mortgage’.
    so based on everything they published and press release, why was I rejected? My payments would have been 25% of my salary, and considerably less than my current rent. And I can’t find any cheaper rentals, even with moving as no rentals in that area and dozens competing for them. But plenty of homes to buy for sale.
    Do you have any active credit agreements?
    All paid off except for car. I’ve been building my credit report for several years - borrowing and paying off, credit cards with low balances but high limits etc - all the things advised to do.
    Unless the cards are 0% they should be cleared every month. Having low balances on them they you are paying interest on is not a good idea and might be a red flag to a lender.
    By low balances I meant spending a little on them each month and clearing it. Then accepting any limit increases so it shows that you are using credit responsibly. I use monthly credit monitoring - check my file and credit expert so have been meticulous in checking every month any potential issues and getting them resolved (eg when a phone company reported my address incorrectly). 
    Interestingly I've been offered an appointment with the in-house broker for skiptons estate agent network as they will manually review if interested in one of their for sale properties 😒)
  • Gorgeous_George
    Gorgeous_George Posts: 7,964 Forumite
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    It’s a step in the right direction but most tenants wouldn’t be able to buy the properties that they are in. They would need to downsize (or ask their landlord to increase their rent for a year!).

    Also, the mortgage would be much more expensive than the rent and it doesn’t cover as much. Things like insurance and ground rents are obvious but what about the occasional new boiler or a new roof? These can be expensive and are things that tenants don’t need to be worried about.

    It could just be a cynical plan to prop up a faltering property market.

    Tread carefully and good luck.
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