First Time Buyers with No Deposit Mortgages

First-Time Buyers with No Deposit Mortgages.

As a first-time buyer, one of the biggest barriers to home ownership is saving up enough money for a deposit. Increased rental costs are making it extremely difficult for many first buyers to put enough money away each month, causing many to struggle to get on the property ladder.

In general, lenders require you to put down a deposit. It can be as little as 5% but in many instances, they require between 10%-20% of the property’s value. The bigger the deposit, the better the rate you are eligible for but with the average UK property price standing at £267,100 (as published by Zoopla Oct 2024), home ownership is out of reach for many first-time buyers.

However, there are some mortgages available where you don’t need to put down a deposit at all and can borrow 100% of the property’s value. We explore some of those products on this page.

Skipton Building Society’s £0 deposit Track Record Mortgage

Skipton Building Society is now offering a mortgage product called the ‘Track Record Mortgage’ to first time buyers with £0 deposit!

These mortgages are primarily targeted towards first-time buyers but others may also be eligible.

In order to be eligible for Skipton’s mortgage product without the need for a deposit, you must meet the following criteria (as stated on their website as of 07/10/2024):

• You mustn’t have owned a property in the UK in the last 3 years
• You must be aged 21 or over
• You must have had no missed payments on debts / credit commitments in the last 6 months
• You must want to borrow less than £600,000

You must be looking to buy a property in the UK (not Northern Ireland) If you are a sole applicant, you must:

• Have paid all rent for 12 months in a row, within the last 18 months. The lender may also want to see proof of payments of household bills. If you are joint applicants (up to 4 people) you must:
• Be able to prove that all rent has been paid either by one applicant or collectively for 12 months in a row, within the last 18 months
• If you’ve been renting separately you must be able to prove that you have paid all your rent

In either case you may be required to evidence proof of payments of household bills

Is there a maximum age limit for the Track Record Mortgage?

As it stands, the maximum age at the end of term is 75, however evidence of expected retirement income may be requested and taken into account. For people reaching State Pension age now, the State Pension age is 66. If you were born after 5 April 1960, there will be a phased increase in State Pension age to 67, and eventually 68.

I have some deposit saved up, can I use this to reduce the amount I need to borrow?

Yes- although Skipton Building Society don’t require a deposit for their Track Record Mortgage, you may still be eligible providing your deposit is less than 5% of the property value.

What documentation do Skipton BS require for proof of rental payments?

Skipton Building Society require 12 months bank statements (full or concise) or a letter from the letting agent (needs to be Association of Residential Lettings Agents (ARLA) registered, or suitable alternative, e.g. NAEA, NACA) detailing the 12 monthly rent payments.

Can I buy a new build home using the Track Record Product?

Yes- you can potentially buy a new build home with no deposit.

Can I apply for the Track Record mortgage alongside other schemes?

The Track Record Mortgage can be used alongside Shared Ownership. However it cannot be used in conjunction with any other schemes.

I rented for more than 12 months but then moved in with family whilst I saved for a deposit, am I still eligible for the Track Record Mortgage?

You may be accepted so long as you can provide evidence of at least 12 months rental payments in the UK, in a row. If all applicants moved out more than 6 months ago, unfortunately you will not be eligible. If you rent again for a minimum of 12 months’ we can consider your application in the future.

You may also want to read up on how Guarantor Mortgages for First Time Buyers could help you, please click here to read on...