A building society has amended a mortgage product which it says appeals to tenants who feel “trapped” in private rental properties.

And the response from brokers has been enthusiastic, with one saying the move opens the door to thousands of more first time buyers. 

Skipton Building Society, which already has a 100% loan to value Track Record mortgage, has now extended it to allow applicants who are currently renting but previously owned.

And it’s increasing its maximum term from 35 to 40 years and the product – previously restricted to existing properties – is now available on new build flats.

The society has also relaxed its rent-to-monthly-mortgage payment criteria meaning it will consider loans which have monthly payments up to 120% of the rent the customer is currently paying – until now it was a 100% limit. 

The final change is that the Track Record product is now acceptable in conjunction with a shared ownership mortgage. 

Jen Lloyd, head of mortgage products and propositions at Skipton Building Society, says: “At an increasingly difficult time for those aiming to get onto the property ladder, we remain committed to finding innovative solutions to support them. Our Track Record Mortgage, which launched in May last year, was designed to help aspiring homeowners who have a strong history of paying rent and bills but due to rising costs are unable to save for a house deposit. 

“And since its launch we have worked hard to make various policy changes to open those doors for even more, listening to customer feedback and monitoring how the product is used. Today, we’re delighted to not only launch a shared ownership version of the product but to expand this offering once again with a series of enhancements that will help even more trapped renters. 

“By increasing the maximum term from 35 to 40 years, allowing new build flats, introducing a shared ownership option, and adopting a more flexible approach to affordability, we’re removing some of the barriers people faced when wanting to use Track Record. We believe that these updates will have a real impact for those who are wanting to have a home of their own.”

Brokers gave an enthusiastic response to the Newspage agency.

Stephen Perkins, managing director at Yellow Brick Mortgages, comments: “This amendment is a stroke of genius from the Skipton. This is a scheme that will now actually help people. Previously, whilst on paper it looked good, the caps on mortgage payments meant most prospective borrowers couldn’t find a property cheap enough to fit the criteria. With the lower cost of shared ownership properties and flats, this will literally open doors for thousands of first-time buyers who have demonstrated an ability to afford the mortgage payments. Take a bow Skipton.” And Justin Moy, managing director of EHF Mortgages, adds: “This is another example of mortgage lenders looking to support home ownership, especially those who may feel stuck in the relentless renting cycle. Using the level of rental payments as a means of borrowing affordability has been difficult to implement in higher-value areas, so the increase to 120% of payments is a step in the right direction. Whilst 100% mortgages for shared ownership purchases are not unique, allowing this on new-build purchases is the headline feature. We just need to keep an eye on short-term property values.”