The Intermediary – March 2026 - Flipbook - Page 48
stress-testing for rate rises and
ensuring monthly payments
remain sustainable over the
long term.
“By limiting borrowing at
levels broadly aligned with
what customers have already
demonstrated they can
comfortably pay in rent, we
avoid stretching them beyond
their financial reality.”
“The market remains buoyant,”
she observes, “with house
prices currently forecast to
rise steadily.”
What are the risks?
While Lloyd points to steady
house price growth forecasts –
Savills predicts mainstream UK
house prices will rise by 22.2%
over the five years to 2030 – for
a borrower with no deposit
there is no buffer if values move
in the wrong direction.
“It might not take much of
a drop in property prices to
push you into negative equity,”
warns Harris.
“However, negative equity is
only crystallised once you exit
the mortgage, and there are
opportunities to get out of a
"What makes you so sure there's a catch?"
negative equity position by
making overpayments.”
Harris also points out that
product transfer options exist,
mortgages above 95% LTV represented just 0.59%
and repayment mortgages naturally reduce the
of new lending – albeit up from 0.40% in Q3
balance over time.
2024 and 0.32% in Q3 2023.
Skipton Building Society has offered a 100%
LTV product since launching its Track Record
for a £300,000 purchase will see their mortgage
Mortgage in 2023 – one of the first to return to
balance reduce by around £30,000 when
this space after the financial crisis.
The product is available to borrowers who can
they come to remortgage after five years – and
assuming no change in property price, they
evidence 12 months of rental and household bill
will be able to consider cheaper sub-90% LTV
payments within the last 18 months, have no
products at that time.”
missed credit commitments in the previous six
The pricing premium is another consideration.
months, and whose new mortgage payment does
Harris points out that even finding an extra 1%
not exceed 120% of their average rent over the
for the deposit could save thousands of pounds.
past six months.
Jen Lloyd, head of mortgage products and
proposition at Skipton, says the product has
“Using Accord’s 5-year fix at 5.83% for 99% LTV
and using FCA cost rules, the cost over five years
is approximately £113,000,” he explains.
supported over £257m in completion value since
“Finding an extra £3,000 for the deposit, so
launch, with completions rising 115% from 2024
£6,000 in total, opens up 98% products such
to 2025.
as Santander’s 5-year fix at 5.19%. Using the
“Our underwriting is deliberately designed to
same FCA rules, the mortgage cost is just over
protect borrowers from affordability pressures,”
£105,000, so the mortgage cost and deposit is
she points out.
£116,000 versus £111,000.”
“Alongside verifying a strong rental track record,
we apply our standard affordability assessment,
46
He explains: “For example, using an Accord
99% product, an applicant borrowing £297,000
The Intermediary | March 2026
Harris cautions that high-LTV products don’t
suit those buying for the short-term, as they
p
