Skipton Launches Deposit-Free Mortgage Aimed at Renters
A deposit-free mortgage aimed at renters has been launched by Skipton Building Society.
It differs from other no-deposit deals by requiring 12 months of rental payments and a good credit history rather than needing a guarantor.
The deal has a 5.49% the interest rate which is more expensive than the average five-year fix of 5%.
Generation Rent, which campaigns on behalf of private renters, says the shortage of affordable properties within the budget of first-time buyers is still the main obstacle for many people.
Will Barber Taylor, from Generation Rent says "It's not necessarily going to help all the people who are looking to buy a first-time home if there aren't more houses available to buy,"
According to financial firm Moneyfacts, there are 15 other deposit-free products on the market which makes just under 0.3% of the UK market.
As rising rents continue to make saving up for a deposit more difficult and the closing of the governments ‘Help to Buy’ scheme, first-time buyers are facing an uphill battle.
The Skipton says it recognised a "gap in the market".
Stuart Haire, chief executive of The Skipton, told the BBC that "until now there has been no solution for them [renters] to buy a property due to a lack of savings or access to family wealth".