"The partnership between developers and lenders is opening the door for a new generation of London homeowners"
- Joel Ellis-Duffy - Foxtons
Despite the Government providing no new support in the recent Budget for first-time buyers, a growing collaboration between developers and lenders is helping London renters make the jump from tenant to homeowner, with new-build houses and flats now eligible for 0% deposit "Track Record" mortgages and developer deposit contributions of up to 5%, according to the latest insight from Foxtons.
With the average monthly cost of renting in London now sitting at £2,736, it remains a significant outgoing and can make it hard for renters to accumulate the deposit required to make the jump to homeownership. However, the capital's developers are tackling this issue head-on, introducing "Track Record" mortgages for renters, allowing them to purchase new-build homes without having to save a mortgage deposit.
A 0% deposit "Track Record" mortgage offers up to 100% loan-to-value (LTV) for eligible buyers who haven't owned a property within the last three years.
Applicants aged 21 and over must show a proven rent payment history covering at least 12 of the past 18 months. In some cases, lenders will consider monthly mortgage payments of up to 120% of current rent, with terms available for up to 40 years and borrowing up to five times income.
Developers across the city are increasingly embracing these new no-deposit mortgage products, working with lenders to make homebuying more accessible for those with a strong track record of paying rent on time.
"The partnership between developers and lenders is opening the door for a new generation of London homeowners," said Joel Ellis-Duffy, sales director for new homes at Foxtons.
"For many renters, saving for a deposit has been the single biggest obstacle to buying, despite a consistent history of paying rent that often matches or exceeds potential mortgage repayments. No-deposit mortgages acknowledge that reliability, allowing renters to redirect what they're already spending into a home of their own."
"For developers, who are also offering support with deposits of up to 5%, it's a fantastic way to expand their pool of potential buyers and help more Londoners realise their ambition of home ownership. With these products now available across both new-build houses and flats, there's a real opportunity for renters to take that step onto the ladder sooner than they might have thought possible."
