Skipton introduces a no-deposit mortgage programme for tenants.

A UK building society has introduced a mortgage that doesn't require a deposit and is exclusively designed for renters.

There are a few additional no-deposit offers, but they all require the support of family or friends for financing.

According to Skipton Building Society, this plan does not require a guarantor, but it does require 12 months of on-time rent payments and a solid credit history.

The interest rate is, however, more expensive than the typical five-year fix of 5% at 5.49%.

The greatest obstacle for individuals trying to jump on the property ladder, according to Generation Rent, a group that advocates on behalf of private renters, is still a lack of affordable homes within first-time buyers' price ranges.

According to financial research company Moneyfacts, there are already 15 additional zero-deposit options available, making up little under 0.3% of the UK market.

First-time buyers have a difficult road ahead of them. Saving for a deposit has become more challenging as a result of rapidly rising rents, and the government's flagship Help to Buy programme, which was designed to assist first-time buyers, is no longer available.

The Skipton, the fourth-largest building society in the UK, claims to have identified a "gap in the market."

Due to a lack of funds or access to family money, Stuart Haire, the society's chief executive, stated "Until now there has been no solution for them [renters] to buy a property."

As part of the government's Help to Buy programme, the Treasury provided loans to buyers of newly constructed homes for 5% to 20% of the cost, and up to 40% in London.

In October 2022, the programme was paused for new applications, however, there are suggestions that it could reopen with a similar structure.

However, a surge in zero-deposit mortgages would not be well received by everybody, given that riskier mortgages with high loan-to-value ratios were a major contributing factor in the financial crisis of 2008.

(bbc.co.uk, themirror.co.uk, skipton.co.uk)