What could go wrong with Skipton's offer?

[WTFH]

If we do have a longer term outlook for a fair drop in the price of houses isn't negative equity on 100% loans going to be a problem? If it is that the homeowners problem not the banks though?

A possible solution to that would be to make the mortgage to be a repayment one - not interest only.
If it's repayment, then each year the bank's risk decreases, the bank is less likely to suffer negative equity. Interest only relies on house prices not dropping below the original price, repayment relies on prices not dropping below the amount left to be repaid.

[vetran]

I really wish these campaigns would get it right and make it clear there's a shortage of property where people want to live, and although that does align somewhat to where people have to live (since that's where they work), that is not the case for a significant number of people who want to get onto the housing market.

There are plenty of houses available elsewhere if people want to move. If the governments levelling up policy, to spread the wealth outside of the southeast, had any traction, that might encourage people to move and ease the issue a little.


As for the new mortgage, given the renters have a proven history of rent payment, the risk should not be any higher than providing a mortgage to someone who qualifies via affordability checks only. I guess the biggest risk is a market fall, but banks are mitigating that by ensuring their valuers are providing (what they regards as) realistic figures, often below what sellers are asking for.

Sadly wrong.

There are 257,331 long term empty homes in the UK. Many are owned and left to appreciate. Not many are available to use.

https://www.bigissue.com/news/housin...ere-in-the-uk/

No one wants to live in Kensington & Chelsea!

AEH’s most recent research – the Nobody Home report – found one in three homes in London’s financial centre are empty, many left to appreciate in value on the housing market.

While the City of London came out on top, Kensington and Chelsea – the borough where the Grenfell Tower disaster happened in 2017 – followed with one in eight homes left unoccupied.

There are 4.61 million private rent households.

https://www.statista.com/statistics/...on%20in%202022.

Are you saying 95% of those on private rent don't want to buy a house? Especially as private rent is about 1.5 times as much as a mortgage?

There are a number of reasons, but a growth in population of 10 million while we built under a million houses may be to blame.

[ladymuck]

The requirement for rental payment evidence is good to see. I've been signed up with a service called Credit Ladder for a few yers now which adds your rental payments to your credit report. It works via open banking, looking for the payee and value that you configure. I signed up in the hope that more lenders might consider a clear rental payment history to be a good thing.

[SueEllen]

The requirement for rental payment evidence is good to see. I've been signed up with a service called Credit Ladder for a few yers now which adds your rental payments to your credit report. It works via open banking, looking for the payee and value that you configure. I signed up in the hope that more lenders might consider a clear rental payment history to be a good thing.

So basically Skipton want first time buyers like you - who could raise some sort of deposit when their valuers down value the property you want you buy.

[courtg9000]

The mortgagees that will be accepted will probably be the lowest-risk mortgagees out of all those applying (say 5% max). The rest won't get anywhere near such attractive terms. It's also possible that the applicants might be required to take out some insurance.

Commercial property loan rates and mortgages are going very high at the moment and there is a little rental dumping. Also big rent increases could be on the horizon which will make mortgage products worth seeking out for those who can.

I have seen a few good large portfolio's hit the market (I personally of about £60 million in about 5 portfolio's - doubleit and you probably have what's out there in the large portfolio's at the moment - normally the large portfolio market would be about half that) since the Truss debacle and some smaller BTL landlords (again there have been some selling off 1's and 2's) may well decide the money is going be of more value under the mattress. The large portfolio market is the one to watch though. When they sneeze the rest of the rental market catches the flu.

As for the owner occupier market, its not really my cup of tea but I suspect a softening is too far overdue in some areas on the ownership front. In terms of rental I think the market needs to soften a bit especially in the South East. Some locations are of control price wise.

[d000hg]

Interest they call it a 'gap in the market'. It's a gap because it didn't work so lenders stopped doing it. There is a 'gap' giving toxic loans and mortgages to people who are likely to default a well, doesn't mean it needs filling

Why are people who have a proven record of being able to pay rent likely to default? It's a very common issue that you see people who are paying substantially more on rent than they would on a mortgage payment, and have been for years, but can't get a mortgage without a deposit.

Having a 5% deposit doesn't make you less likely to have problems paying each month.

[DealorNoDeal]

Why are people who have a proven record of being able to pay rent likely to default? It's a very common issue that you see people who are paying substantially more on rent than they would on a mortgage payment, and have been for years, but can't get a mortgage without a deposit.

Having a 5% deposit doesn't make you less likely to have problems paying each month.

If property prices were to fall significantly, then some might be tempted to offload a negative-equity property. A guy I worked with in the late 80s bought a flat with a 100% mortgage, and ended up letting the BS repo it.

[d000hg]

If property prices were to fall significantly, then some might be tempted to offload a negative-equity property. A guy I worked with in the late 80s bought a flat with a 100% mortgage, and ended up letting the BS repo it.

And then you still owe them the rest don't you, and get a CCJ and cannot get a mortgage again. But again, the sort of people who have no bad history renting are the sort who are unlikely to do this.

[DealorNoDeal]

And then you still owe them the rest don't you, and get a CCJ and cannot get a mortgage again. But again, the sort of people who have no bad history renting are the sort who are unlikely to do this.

The mortgage is secured on the property, so it's the lender's tough luck if the property is worth less than the mortgage.

But sure, it will affect your credit rating.

I may be wrong but I seem to recall that, even if they lend 100%, they insure 20% of the loan against default ie. their maximum exposure is only ever 80%?

[WTFH]

The mortgage is secured on the property, so it's the lender's tough luck if the property is worth less than the mortgage.

Hence the suggestion above of making it an repayment-only mortgage, which is lower risk for the lender than interest only.