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Residential Property

The Return of the 100 % Mortgage

Thursday, May 11, 2023

Skipton Building Society has announced the launch of its new mortgage product that will allow homebuyers to borrow 100% of a property value to get onto the property ladder.

Whilst there are many mixed reactions to the return of the 100 % mortgage, the intention is to “take away the dependency on the Bank of Mum and Dad or guarantors”.

It is said that house prices for first time buyers have risen by an average of 18% in the last two years which equates to an increase of nearly £40,000!

Skipton Building Society has claimed they will ensure that the buyers utilising their Track Record Mortgage will not be paying more on a monthly basis than what their current rent is. For example, a tenant paying an average of £800 per month over the last six months will have a maximum monthly mortgage payment of £800. Based on the mortgage rate of 5.49% that means the maximum 100% loan taken over a 35-year term would be £149,153.

Renters will also have to pass all the usual affordability tests and credit scoring and even if their income would allow them to borrow more than this, the maximum they can borrow will be capped by the rental calculation.

There are some conditions to the mortgage, namely borrowers will need to be able to show that they have a track record of paying rent which is comparable to mortgage repayments with evidence of a minimum of 12 months of rental history and is only available to First Time Buyers. You can borrow no more than £600,000 and the maximum mortgage term is 35 years.

Online property listings site Zoopla also estimates that homebuyers with a salary of between £40,000 and £60,000 buying in parts of the country where house prices are lower than average, such as the North West and parts of Scotland, will be most likely to benefit from this new product.

Skipton’s home financing chief executive Ms Harrison said: “We need to tackle the UK’s housing affordability crisis to enable more people, especially renters who are trapped in renting cycles, to buy their first home.

“People trapped in renting is one of the UK’s biggest housing challenges, having a massive impact on the fabric of our society.

“With escalating rents and the cost-of-living squeeze further impacting people’s ability to save for a house deposit, it’s making it almost impossible for people get on to the property ladder.”

She added: “It is time for a rethink on these massive barriers to home ownership.”

If you have any queries regarding the schemes available to First Time Buyers, please do not hesitate to contact the residential conveyancing team at Samuel Phillips Law on 0191 255 0255 or email

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