A 22-year-old has purchased her first home with a 100% mortgage, defying the trend of rising average ages for first-time homebuyers. Saffron Green and her husband, Reece, 24, bought a three-bedroom semi-detached house in Pontefract for £156,000, a property valued at £4,000 above their agreed price. This feat was achieved through Skipton Building Society's Track Record Mortgage, a product launched in May 2023 that allows individuals with a consistent rent payment history to borrow the full property value without a deposit.
Green attributes her early entry into homeownership partly to forgoing university in favor of working from a young age. "I have always been a grafter like my mum and dad," Green stated, having worked in various roles since 16, including as a travel sales adviser, at B&M, McDonald's, and as cabin crew. She noted that many peers her age continue to live with parents while pursuing degrees that may not guarantee immediate career prospects.
The couple spent over 18 months renting and found saving for a deposit challenging due to ongoing expenses such as rent, bills, and car costs. "My husband and I didn't really want to rent, and both always wanted to get on the property ladder," Green explained. "About a year into renting we realised how hard it was to save, pay rent and bills."
The Track Record Mortgage requires borrowers to demonstrate a history of timely rent payments and the ability to afford mortgage payments. While Skipton allows borrowing up to 150% of monthly rent, it caps borrowing at 4.49 times gross annual income, with a maximum mortgage of £600,000. For Green and her husband, this meant a monthly mortgage payment of £782, which is less than their previous rent of £875, a figure set to rise to £950. They secured a five-year fixed rate at 5.29% for a maximum term of 40 years and are making additional payments of £18 per month.
Despite the financial advantage and the security of owning their home, the couple has encountered unexpected renovation costs. A survey did not identify all the issues now facing them. "The survey cost us £450 and didn't spot any of the hidden issues we are now facing," Green said. They are approximately 50% through their renovations, with the kitchen being the next project, and are undertaking some work themselves while hiring specialists and receiving help from Green's father.
Experts caution that 100% mortgage products carry risks, particularly if property values decline. If a home's value falls below the outstanding mortgage amount, it can lead to negative equity, making it difficult to remortgage or sell. Ravesh Patel, director at Reside Mortgages, advised buyers using such products to have a clear plan for reducing the loan balance through overpayments and not to rely solely on future property price appreciation. Mortgage rates have recently increased due to inflation, impacting both new buyers and those remortgaging. Skipton's 100% mortgage has a rate of 5.65%, while rates for buyers with a 5% deposit start around 4.97% and for a 10% deposit, as low as 4.74%.