Should you get a 100% mortgage? It’s not the easy route to home ownership London renters are hoping for

Buying a house with no deposit could be a risky move, especially at a time of economic uncertainty
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Daniel Lynch

London renters might be overjoyed at the return of deposit-free mortgages but, as with anything that seems to be a silver bullet for aspiring buyers, 100 per cent mortgages come with a health warning.

True, Martin Lewis has called it a “sensible” solution for some borrowers, many of whom have stable, decently paid jobs but don’t have families to help with deposits.

Private renters also tend to be shelling out an extortionate proportion of our salaries on housing — so why should it be so hard to convince lenders we could pay the same towards a home of our own?

That’s certainly the line Skipton Building Society is peddling with its Track Record Mortgage, offered exclusively to first-time buyers. Monthly repayments are capped at the average of a buyer’s last six months’ rental costs.

So, should we all jump in?

House prices are forecast to keep falling this year, especially in London, although the five-year fix may add a buffer against short-term danger.

Nonetheless, experts advise caution, saying it is still preferable to build up as much equity as possible, not least to keep mortgage repayments lower.

In London these now dwarf monthly rents like never before, Hamptons data showed earlier this year.

So, renters would have to move to cheaper homes in less expensive areas to meet affordability criteria.

It’s a London story for the ages, trading in glamorous yet precarious Zone 2 lifestyles for stability in the suburbs.

That said, if stability’s what you crave, perhaps an experimental mortgage isn’t for you.

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