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"This amendment is a stroke of genius from the Skipton" and "open doors for thousands of first-time buyers"

Journalist: Justin Moy, Contributing Editor

ended 02. September 2024

Skipton BS has today announced it is launching a Shared Ownership Track Record mortgage to enable more aspiring homeowners who are trapped in the rental cycle to have the chance to buy their own home. It has also extended its Track Record Mortgage scheme, including a Shared Ownership option for borrowers. Skipton is enhancing and extending the borrowing policy of its Track Record Mortgage, which provides a 100% mortgage exclusively for renters.

One broker said simply: “This amendment is a stroke of genius from the Skipton. This is a scheme that will now actually help people. With the lower cost of shared ownership properties and flats, this will literally open doors for thousands of first-time buyers who have demonstrated an ability to afford the mortgage payments.”

The new Track Record Mortgage policy enhancements which start today include:

  • Maximum mortgage term increase from 35 to 40 years.
  • Now available on new build flats.
  • New flexible underwriting approach to the “household to household” criteria

Where policy allows, Skipton may accept applicants without rental experience as long as an accompanying applicant meets all eligibility criteria.

  • Relaxed rent to monthly mortgage payment criteria

After one year of helping renters into their homes, Skipton has made various improvements to the way it calculates affordability. This means that, in some circumstances, Skipton will lend loans which have monthly payments up to 120% of the rent the customer is currently paying.

Newspage asked brokers for their views, below.

6 responses from the Newspage community

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Editor
Justin Moy
Managing Director at EHF Mortgages
This is another example of mortgage lenders looking to support home ownership, especially those who may feel stuck in the relentless renting cycle. Using the level of rental payments as a means of borrowing affordability has been difficult to implement in higher-value areas, so the increase to 120% of payments is a step in the right direction. Whilst 100% mortgages for shared ownership purchases are not unique, allowing this on new-build purchases is the headline feature. We just need to keep an eye on short-term property values.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
This amendment is a stroke of genius from the Skipton. This is a scheme that will now actually help people. Previously, whilst on paper it looked good, the caps on mortgage payments meant most prospective borrowers couldn't find a property cheap enough to fit the criteria. With the lower cost of shared ownership properties and flats, this will literally open doors for thousands of first-time buyers who have demonstrated an ability to afford the mortgage payments. Take a bow Skipton.
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Darryl Dhoffer
Founder at The Mortgage Geezer
Skipton Building Society's latest product launch, 'Track Record Shared Ownership,' is a familiar offering. While it's a safe choice, it's not groundbreaking. Kent Reliance has been offering a similar 100% LTV product for years, without requiring a rental track record. So while it's commendable, its only a small party popper for me, and doesn't warrant huge celebration.
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Ben Perks
Managing Director at Orchard Financial Advisers
Skipton have spiced up their Track Record mortgage offering by including Shared Ownership. It's great to see more innovation from a lender that is keen to help where other lenders refuse to.
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Gabriel McKeown
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
This initiative is set to transform the landscape for aspiring homeowners, offering a lifeline to those currently locked out of the property market. However, there are concerns about the long-term financial strain on borrowers, with the relaxed rent-to-mortgage payment criteria potentially leading to financial difficulties if borrowers' circumstances change or interest rates rise after the initial fixed period. Additionally, the potential for negative equity is heightened with 100% mortgages, so If property prices decline, homeowners could find themselves unable to sell or refinance without incurring a loss. As the housing market continues to evolve, initiatives like these could be a promising bridge to homeownership, however it's crucial to ensure it's not a bridge too far.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
This is great news and is a real boost to those looking at Shared Ownership as their entry point into home ownership, and with it being the only real homebuying scheme of scale available currently, following the closing of Help-To-Buy, it will be more and more people looking at this option. Until now the vast majority of lenders still needed a 5% or 10% deposit to access their Shared Ownership deals, I can only think of one other lender offering a 100% shared ownership mortgage, so anything that increases a potential borrower's choice in this sector is always going to be well received.