Renters no longer have to wait 7.9 years to get keys to their first home
Our founding purpose is to help more people own their own home. Two weeks ago we took a stand by launching a new option for aspiring first-time buyers that no lender has before. I couldn’t be prouder of the impact it’s having.
The Skipton Group touches each aspect of the property journey like no other: from first-to-market savings products like the Lifetime Individual Savings Account; to innovative and disruptive mortgage products like Track Record; combined with the UK’s largest estate agency supporting renters and buyers alike.
I joined Skipton Group with a passion to collaborate with like-minded colleagues who want to help as many people as possible in achieving their financial and home security dreams.
How we know there’s need for change
We know from our interactions with customers that there’s a strong feeling of imbalance for those wanting to get onto the property ladder. The cost-of-living crisis is cited as the main setback for renters wanting to buy, who are now saving less for a deposit than ever before. More than one in three of those we spoke to (35 per cent) are struggling to save due to increased rent – and are now having to find an extra ￡1,000 per year for their landlord.?
The mortgage market is in desperate need of disruption.
There are 4.6m households renting privately across England alone, according to the English Housing Survey, which is more than double (+112%) the number recorded in 2000. Rental research we commissioned with OnePoll exposed how eight in ten tenants feel ‘trapped’ in the rental cycle, paying rents that prevent them saving a deposit to buy their own home.
Our unique data helps us build a leading proposition
Skipton Building Society’s Track Record Mortgage aims to free people who feel trapped in the rental cycle.
The product has been designed responsibly - considering the challenges renters are facing now, together with any potential risks they may encounter as a homeowner.
One example of this is ensuring buyers will not pay more than their current rent each month.
Based on data from our estate agency network and the ONS House Price Index the average Great British rent amount is ￡1,290. An applicant borrowing at 100% loan to value with an interest rate of 5.49% over a 35-year mortgage term could see Skipton Building Society lend them up to ￡240,509 (subject to criteria, credit score, affordability, and rental track record).
Example potential loan using averages from ONS House Price Index and Hamptons estate agent (part of Skipton Group)
GB Average monthly rent in Q4 2021 - ￡1,160
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GB Average monthly rent in Q4 2022 - ￡1,290
Year on Year price change to monthly rent - ￡130
100% Track Record Monthly Payment - ￡1,290
Max Property value with 100% LTV based on monthly rent - ￡240,509.54
According to our research with OnePoll, which surveyed 2,000 renters, the average aspiring first-time-buyer is saving ￡251 per month towards a deposit.
If we expect these people to save a 10% deposit for a property worth ￡250,000 it would take an average of 7.9 years before they could get the keys to their own home.
During this time the gap between saving and owning could grow even larger due to escalating monthly rental costs.
Pooling talent across the Skipton Group to make dreams a reality
Over a period of months, we’ve been collaborating across our businesses to create our Track Record Mortgage product and truly make a difference.
Skipton Building Society’s ‘behaviours’ of accountability, curiosity, collaboration, and bravery have been abundant.
My thanks go to all our colleagues who worked tirelessly on getting the product into shape, and to those who are now supporting hundreds of potential customers who are newly hopeful that their home-owning dreams could now become a reality.
I look forward to sharing some case studies soon! ?
What’s next you ask?
One of our objectives was to stimulate some disruption in our sector. I’d love to see more lenders come to the table with new products that provide opportunities for those unable to access the property market. We know there’s still much more to do!
At Skipton Group, we’re also going to continue innovating across all areas of our business. So, let me know your thoughts – where do you think society needs us most next?
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1 年Hi Stuart I can see that your having a great impact helping first time buyers so well done for that . However my son recently received a mortgage offer from Skipton so that he could buy his apartment that he has lived in for 17 years . However Skipton are insisting on a Ground rent cap in 82 years time ! The lease is 182 years , the lease company are not prepared to do this . He is devastated, his Morgage will be paid in 30 years , he is 35 … He wont be and no one from Skipton will be alive in 82 years time … He has saved hard for a substantial deposit , works hard and the solicitor is also baffled. So please can you look into why this can be happening within your legal department and I will kindly thankyou and your company…. Julia Eaton
Prudential Risk Senior Leader available for immediate permanent and interim opportunities. Reg Engagement, Risk Leader, Material Risk Taker, IRB, Basel 3, IFRS9, Stress Testing, Transformation
1 年It is fantastic and I personally benefitted from a 100% deal in 2007. Stuart Haire - how do you deal with the Scottish system where you need above and beyond the valuation?
Communications Manager at Skipton International | Communications, Sponsorships, Events
1 年It’s a fantastic initiative. Fortune favours the brave!
Director, Fraud Risk Management
1 年Stuart, I can tell you first hand it is getting lots of the 20somethings in my family seriously thinking about buying their first home sooner rather than later, whereas ownership had seems years off, if ever attainable.