Will 100 per cent mortgages come back?

I think 100% mortgages are a great idea. When we look back to the heady days ahead of the banking crisis, it wasn't the LTV's that caused issues, it was the credit quality of the borrowers. I would imagine lending to people with good credit and steady incomes is a good opportunity for lenders.

The reintroduction of 100% mortgages is an intriguing development. Notably, this financing option would undoubtedly appeal to first-time buyers eager to take their initial steps on the property ladder, while also potentially benefiting those seeking to maximize their affordability.

While the borrower stands to gain significantly from not needing a deposit, it's important to acknowledge the potential risk to the lender. Nonetheless, this risk could be offset through carefully structured interest rates.

Undoubtedly, the introduction of 100% mortgages is a move that is likely to gain momentum, and those who are willing to take the plunge will undoubtedly reap the rewards.

Barclays Bank has been offering its Family Springboard product, which provides a 100% mortgage, and it is encouraging to see Skipton Building Society following suit by launching its own 100% mortgage offering. Although 100% mortgages have been viewed sceptically in the past, the shift towards more responsible lending practices since 2014, means that it is now feasible for lenders to provide such a product. This development is significant as it offers future borrowers an alternative to relying on the "Bank of Mum and Dad." It would not be surprising to see other lenders join Skipton's initiative, as they aim to cater to the evolving needs of borrowers.

It's nearly 15 years since they last were widely available but this time, rather than a measure of gung ho and reckless lending as it was then, - hopefully it's now a clear sign of confidence in the residential property market and stability of the UK banking system, that the prospect of 100% lending is even being tentatively mooted again.

Despite some negative historic connotations, demand for such an option would unquestionably be strong and for first-time buyers in particular any such opportunity would be warmly welcomed and appreciated.

Of course, holistic advice, sensible lending and common sense underwriting assessment will be of paramount importance but - since the lessons of the past - these are the pillars on which UK mortgage lending is now solidly based and so should be a given.

It will, however, be a brave lender that is the first to put their head above the parapet but when this happens others will undoubtedly follow.

The fact that for so many first-time-buyers the dream of homeownership depends on how well-capitalised their branch of the bank of mum and dad shouldn't sit right with anyone who gives a hoot about social mobility. That means I certainly do think lenders and the government really should be looking at innovative ways to make zero deposit home purchases possible otherwise we are walking into a timebomb where generations of people are condemned to a retirement of poverty stuck in private rented accommodation, scraping by on whatever pension income they might have after the landlord is paid.

Saving for a deposit is the single biggest barrier for the majority of first-time buyers, so a 100% mortgage makes a lot of sense, I think there are very few people beyond first-time buyers where a justifiable case for a 100% mortgage can be made. The biggest issue with this type of borrowing is that you need to be very careful about who you lend to, the credit score should be, quite rightly, tight with only those able to demonstrate good financial management making the grade. A lot is often made of the risk of borrowers going into negative equity with any form of 100% mortgage, which is a risk, but not materially too much greater than those with a 5% or even 10% deposit, as any downward shift in property prices are likely to put these groups in exactly the same situation, just to a slightly lesser degree.

I think there would be a huge amount of demand for 100% mortgages an innovative lender could take a large share of the market by looking to introduce them.

I think realistically any 100% mortgage would need to be on a 5 year fixed rate minimum to ensure that any fall in house prices can be ridden out.

The advantages are that customers will not need to come up with a deposit which will greatly help those who are trapped in the cycle of renting.

The biggest concern will be around the potential for negative equity so it will be important for customers to be aware that they may need to stay in their home for a long period of time to benefit from increases in house prices.

Skipton have already announced they will be offering 100% mortgages however details are thin on the ground. I think other lenders will assess how Skipton's move goes before committing themselves to 100% lending.

Most people agree it’s an absolute priority to help people get on the housing ladder, and yet there are some concerns around 100% mortgages. We don’t have to go far back in time to see why these haven’t been around for a while. A major disadvantage is that any reduction in the value of property traps people in negative equity. We all know how hard it is to save for a deposit, but it really does help people learn how to manage money. As with so many ideas being thrown about recently, the devil is in the details, so we need to wait and see how lenders will approach and manage any relevant products.

An old solution to a problem that never went away. Lack of affordability is probably the key factor that prevents people from getting on the housing ladder. Not the affordability of the mortgage but the inability to save thousands (often tens of thousands) for the deposit. Instead, families up and down the country are locked into a rental market where they often pay more in rent than they would with an equivalent mortgage without any of the security that goes with home "ownership".
100% and 100% plus, mortgages offer the solution. The argument about negative equity ignores the fact that people are using unsecured borrowing to fund deposits and renovations. Use of affordability calculations for mortgages drastically reduces the risk of defaults.

Many will see 100% mortgages as the solution to their problems, high rents are making it difficult for those in rental accommodation to get on the property ladder. However at what cost will these be and who will these be available to, usually we find these products are only available to a select few and usually to those who actually dont need them. There will need to be some careful consideration when it comes to lending 100% of a property's value.

100% mortgages are a great concept, Barclays and Tipton have been offering this for several years so it's good news that Skipton will be launching their version very soon. First-time buyers, home movers and homeowners who are remortgaging can all be eligible for 100% mortgages.

Lenders are always looking to innovate and improve their product offering so we may well see other lenders follow Skipton into this market over the next 12 months.