Skipton Building Society is looking to launch a new mortgage designed for people who have trouble finding enough money for a deposit on a home but have rented for years gracegausden93 and Catherine Lafferty report
In addition to difficulties getting onto the housing ladder, renters now also face new challenges in the market with rental prices following a sharp upward trajectory.However, attempts to reduce deposit requirements could be seen as a controversial approach as borrowers have previously got stuck in, which is when the value of a property becomes less than the mortgage originally taken out for it.
This was a prominent issue in the financial crisis with former bank, Northern Rock, requiring no deposit while it offered loans of up to 120 per cent of a home’s value. For Skipton to introduce a new product to the market, it would have to be approved by the Bank of England’s Prudential Regulation Authority and the Financial Conduct Authority.
Haire said: “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 increasing costs of living, but doing nothing isn’t going to solve this issue. “We’re ensuring all these considerations and more are going into the development of our new product. We’re carefully looking at how we can best tackle the challenges that generation rent are facing, together with managing the potential risks and challenges they may face in the future too.”
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