Skipton Building Society 'still a prudent lender' as hundreds snap up no-deposit mortgages

In published results this week, Skipton revealed that the offer had received more than £62m in applications. Almost 500 borrowers have signed up.

It also launched an ‘Income Booster’ scheme in which first-time buyers can increase their buying power by adding up to three more people onto a mortgage without making them a legal owner of a property. That scheme received £327.5m in applications.

Across 2023, Skipton recorded a 40 per cent rise in the number of first-buyers it supported to more than 19,000 people.

Larger deposit requirements have become a standard feature of the mortgage market since the global financial crisis, which saw lender Northern Rock collapse in the UK.

Stuart Haire, chief executive of Skipton Group which includes Skipton Building Society, said take-up of the deposit-free mortgage option had been “pretty much in line with expectations”.

He said that strict lending criteria apply to the deals, which are designed for aspiring buyers whose monthly rental payments outstrip what they would be paying on a mortgage.

“We are a very prudent lender and the way we do it is we don’t compromise on affordability and making sure the people who get it can afford it,” he said.

"It means those customers that don’t have the Bank of Mum and Dad and can’t save tens of thousands for a deposit can still get a house they can afford.”

Skipton Group also encompasses Connells Group, the UK’s largest estate agency, with over 80 high street brands including Connells, William H Brown, Hamptons and Bairstow Eves. It is responsible for one in ten houses bought and sold in the UK.

Skipton released analysis from its estate agency business which showed during 2023 there was little sign of landlords exiting the rental market and less than one per cent of tenants in arrears.

The figures came despite widespread predictions that rising interest rates would result in both landlords selling up and rents becoming increasingly unaffordable to tenants as mortgage increases were passed on.

But Skipton’s analysis also showed there were 10 per cent more rental properties on the market in December 2023 than at the same point the year before.

Mr Haire said: “Landlords are not exiting the market and they are being responsible and proportionate in passing on increasing costs.

"When you are thinking about property as an investment you are not thinking in the short-term.”

Skipton’s figures for house sales showed a five per cent increase in the number of properties being put on the market in 2023, with its branches now having an average 54 properties for sale each. However, viewings were six per cent down on 2022.

Mr Haire said there has been growing demand for properties in the early part of this year as consumers have greater confidence about the stability of mortgage rates.