SKIPTON’S new deposit-free mortgage – designed to help ‘trapped renters’ to ‘commence their home ownership dream’ – will not be available in Jersey owing to ‘extended affordability challenges in the Channel Islands’.
The building society’s 100% Rent Track Record Mortgage for first-time buyers was launched this week in the UK in an effort to help people affected by ‘escalating rents and the cost-of-living squeeze’.
However, a statement from Skipton International – the Channel Islands’ offshoot of Skipton Building Society – confirmed that there were ‘no plans’ to implement the product locally, citing the ‘the substantial affordability challenges that first-time buyers face across the Channel Islands, which are far higher than the UK’.
Yesterday, the Bank of England announced it would be raising its base rate by a quarter of a percentage point to 4.5%, which will have further implications for mortgage holders.
The Track Record Mortgage is available only for renters in the UK who have a clean credit record and who have demonstrated at least 12 months of successful payment of their rent. It also has constrained affordability criteria compared to deposit mortgages and other checks to mitigate mortgagees from over-extending themselves, and is therefore not suitable for everyone.
Announcing the launch of the Track Record Mortgage in the UK, the chief executive of home financing at Skipton, Charlotte Harrison, said: ‘People trapped in renting is one of the UK’s biggest housing challenges, having a massive impact on the fabric of our society.
‘With escalating rents and the cost of living squeeze further impacting people’s ability to save for a house deposit it’s making it almost impossible for people to get onto the property ladder.’
However, Jim Coupe, a Skipton Group Building Society executive committee member and Skipton International’s managing director, explained that, ‘with extended affordability challenges in the Channel Islands the constrained affordability of the Track Record Mortgage would not support first-time buyer purchases’.
He added: ‘Skipton International will be monitoring the development and success of the Track Record Mortgage with interest but has no plans to implement in the Channel Islands at present.’
Mr Coupe instead pointed Islanders towards the Next Generation Mortgage which has been offered in the Channel Islands since 2010. While this product also offers 100% Loan to Value, the Next Generation Mortgage requires a guarantee provided by a close family member.