I have been advising on mortgages for over 15 years and the deposit has always been the main issue for most first-time buyers.
As well as finding the deposit money, you need funds for solicitors, valuation fees, potentially stamp duty and then furnishing your property.
Not every first-time buyer can rely on the “Bank of Mum and Dad” for their deposit. I have often found if 2 people are buying together whether they are 2 friends or a couple they can afford the mortgage payments but don’t have a big enough deposit. A response I often get is “Well we are paying more on our rent a month than potentially on the monthly mortgage payment so we know we can afford it”.
It is often more difficult if you are buying on your own to get the mortgage you require due to lenders affordability checks.
There are a number of lenders offering 90% and 95% mortgages, so you will need to save at least 5% to 10% deposit to get a mortgage. I remain optimistic that more lenders will be more innovative this year and offer more products that can help first time buyers. Skipton Building society are a lender who are currently offering a product that could help many first-time buyers get on the property ladder.
If you are currently renting Skipton Building Society have a product called Track Record Mortgage.
They are offering up to 100% loan to value mortgage if you are currently renting and have proof of having paid rent and household bills for the last 12 months. You also have to be over 21 years old and not owned a property in the UK for the last 2 years.
An application would then be subject to the standard affordability and criteria checks.
I would generally advise any first-time buyer to save as bigger deposit as they can. However, I understand for many this is not possible due to circumstances, i.e. paying high rents and just not being in a position to save.
A product like the Track Record mortgage that Skipton are offering maybe the only option for many. Speak to a mortgage broker who can assess all options available to you. If thinking about a 100% mortgage, don’t just think about the here and now think about when your fixed deal ends what potential options will be available to you. You may be relying on your property to go up in value to give you more mortgage options once your fixed deal ends.
This is an option worth considering, it will not be right for everybody, but it is positive to see lenders offering alternative products to first time buyers.
If you’re a first-time buyer struggling with a deposit, please feel free to contact me to discuss your options. It’s all about finding the right product for your situation and ensuring you’re making a decision that will work for you now and in the future.
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The information contained within was correct at the time of publication but is subject to change. 26/03/2025
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