Skipton Building Society’s controversial 100% loan-to-value mortgage has attracted £91.5m in applications since it was launched a year ago.
The mutual’s Track Record loan allows tenants over 21 with “a strong track record of rental payments” to borrow the total cost of a property on a five-year fixed rate at up to a maximum of 35 years.
It says Scotland has seen the biggest take up of the product, accounting for 15% of applications, followed by the North West, at 14% and the South East, at 12%. The average nationwide purchase price of property was £152,015.
The move was welcomed by many brokers, though others cautioned the measure could see these homeowners fall into negative equity following a rise in property prices.
Also, in the run-up to the Spring Budget in March the Chancellor was understood to be drawing up plans for a 99% mortgage scheme.
However, Jeremy Hunt was forced to scrap the plan as major lenders were not prepared to grant loans to borrowers with less than a 5% deposit.
There are currently a handful of zero-deposit products on the market. accounting for just under 0.5% of the UK home loans.
Skipton Building Society head of mortgage products and proposition Jen Lloyd says: “We know there isn’t one quick solution to addressing this huge societal challenge of tenants being trapped in renting cycles, with rents escalating faster than mortgage payments and the increased cost of living but doing nothing isn’t going to solve this UK housing issue.
“This is why we decided to further expand the product criteria late last year to not only help FTBs but other renters who have fallen off the property ladder.
“We will continue to do more to innovate, not only in this space, but in other areas to unlock homeownership for more.”
