One of the country's biggest mortgage lenders has announced deposit-free mortgages for those currently renting, hoping to address one of the big hurdles that prevents first-time buyers getting onto the property ladder.
But while Skipton Building Society's 100% mortgage doesn't require a guarantor, it does have an interest rate of 5.49%, making it one of the more expensive five-year products on the market.
"People trapped in renting is one of the UK's biggest housing challenges, having a massive impact on the fabric of our society," Skipton's Charlotte Harrison told This is Money.
"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 get onto the property ladder.
"We recognise there's a clear gap in the market for people who have a strong history of making rental payments over a period of time and can evidence affordability of a mortgage – but there is currently no solution for them to buy a property due to lack of savings or access to family wealth."
The mortgage lender will loan up to £600,000 to those looking to buy their first home, with many people aiming to buy in London having to almost max out that amount – the average price of a home in the capital was £523,666 in March 2022, according to the latest statistics available.
Will it help?
A lack of affordable housing remains a huge problem for those renting, with very few 100% mortgage offers available on the market, while high rental costs make it hard for people to save.
Commenting on the new mortgage, Will Barber Taylor from campaign group Generation Rent told the BBC: "It's not necessarily going to help all the people who are looking to buy a first-time home if there aren't more houses available to buy."
According to Shelter, there has been a huge decline in house building (as well as a drop in social housing) over the past 50 years, with just 1.3 million homes built in the country since 2010 – pushing prices for existing housing stock up.
Data recently released by the Office of National Statistics (ONS) shows the biggest hotspots for unaffordable housing in England and Wales.
Of the 20 areas with the worst affordability ratios in England and Wales, 18 were in London – with Kensington and Chelsea seeing the worst ratio at 38.4.
The top 10 unaffordable ares in England and Wales were named as:
Kensington and Chelsea (38.39)
Richmond upon Thames (20.73)
Epsom and Ewell (20)
St Albans (18.44)
To find out the affordability ratio in your area, click the image below to take you to the ONS website.
ONS statistics also show that while wages have increased over the past 25 years, property prices have far outstripped wage hikes. Indeed, on average, ONS data show that earnings have doubled since 1997 –but house prices have increased by four and a half times.
In 2022, the most recent year that statistics are available, full-time workers in the UK spent an average of 8.3 times their annual salary on buying a house, with the situation becoming far more dire over the past 25 years.
Just 7% of local authorities had an affordability rating of less than five times workers earnings in 2022, compared with 89% of local authorities in 1993.
The situation improved in 2022, though it is yet to be seen whether this is a blip or the beginning of a downward trend.
In 2020, the government pledged a £12.2bn investment into affordable housing – of which £700 million was intended to be used to build new homes.
Then-housing secretary Robert Jenrick said at the time: "This government is helping hard-working families and prospective first-time buyers get their feet on the housing ladder in an affordable way.
"Thanks to the range of flexible ownership options being made available, more families across the country will be able to realise their dreams of owning their own home, with half of these homes being made available for ownership."
However, the pledge to build 300,000 new homes per year was downgraded from mandatory to advisory by prime minister Rishi Sunak last year, and recent analysis suggests that the number of new builds will fall thanks to a swathe of new planning restrictions.
The Labour Party has pledged to reintroduce house-building targets, but leader Keir Starmer was accused by Sunak of wanting to “concrete over the green belt”.