At Skipton Building Society, we have set an ambitious strategic objective to help eighty thousand first time buyers realise their dreams of home ownership over the next five years. We believe that everyone deserves a chance to have a place that they can truly call home and we are committed to making this dream a reality.
To help us achieve this, we have developed a multifaceted proposition that aims to empower and assist prospective first time buyers. In my opinion, our products and services for first time buyers are wide reaching, catering for many customer demographics. We can offer up to 95% loan to value on the following:
- New build houses, on standard purchases
- Shared Ownership mortgages in England and Wales
- Homes England mortgages
- LIFT scheme mortgages in Scotland
- Joint Borrower Sole Proprietor
Plus, we now have our latest addition of up to 100% loan to value with our Track Record Mortgage proposition.
A gap in the market...
We recognise that there is a clear gap in the market for first time buyers who have a decent track record of making rental payments and can demonstrate mortgage affordability. Our goal with Track Record is to tackle the issue of housing affordability, specifically for renters who feel trapped in a cycle of renting. Statistics from the Office for National Statistics (ONS) reveal that house prices for first time buyers have increased by an average of 10% in the 2 years up to March 2023, amounting to a rise of circa £22,230 on average.
The problem of rental cycles has persisted in society for many years. A survey of two thousand adults (commissioned by Skipton Building Society) residing in rental properties discovered that 86% of them dream of one day owning their own home. However, with rising rents and the strain of living expenses, the dream of homeownership becomes increasingly challenging.
Current setbacks for renters
The cost-of-living crisis is the most common setback for renters as they now save less for a deposit, while 41% say house prices in their area are rising too quickly for them to keep up. More than one in three people renting (35%) are struggling to save as their rent continues to increase. 42% believe their mortgage payment would be more affordable than current rental payments. With rent forecast to continue to rise, our 5 year fixed Track Record product offers peace of mind to these borrowers by securing their monthly payment for the 5 year period.
Unfortunately, the proposition can’t work for everyone. Applicants need to meet our prudent policy, criteria and affordability to qualify. It could be harder to get the mortgage to fit in certain regional areas depending on rental payments and house prices, however, a solution may be workable for borrowers who are willing to compromise. In the survey mentioned above, 48% said they were willing to give up a specific requirement they had always wanted for their first home. For example, this could be moving to a more affordable area or downsizing to a property with fewer bedrooms to get their foot on the property ladder.
In my opinion, being a modern mutual requires a fresh perspective and commitment to making a real difference in people’s lives. I believe that Skipton Building Society is striving to break free from the conventional norms to shape a future that aligns with the aspirations and needs of our members and society as a whole.
Our commitment to innovation and technology
We constantly seek innovative creative ideas by listening to feedback from Intermediaries at our Skipton Listens Broker Forum and by embracing new technology, ideas and methods to serve the broker community and our members. We strive to anticipate their evolving needs and provide solutions that surpass expectations. We understand that true progress requires stepping outside our comfort zone and thinking outside the box.
Another noteworthy mention is the Sesame Bankhall Group’s, PMS Industry Panel for Financial Advice (IPFA) White Paper, published 16th June 2022. This really resonated with me. It highlights the challenges first time buyers are facing in the UK and offers examples of solutions that could help overcome the barriers. Skipton’s Track Record proposition directly addresses some of the issues highlighted within the paper around deposit challenge and the rental market. However, it will take much wider collective effort within the industry between lenders, distributors, policy makers, housing associations and other stakeholders to create a more inclusive and supportive environment for aspiring home-owners.
Our Track Record Mortgage here at Skipton Building Society is not a silver bullet, but I believe it’s a step in the right direction which will hopefully encourage and inspire more lenders to be innovative.