A mortgage with no requirement for a deposit has been launched by the Skipton Building Society.
Specifically designed for people renting currently, applicants must have a good credit record and twelve months of unbroken rental payments to meet the loan's criteria, said the society.
Interest rates at 5.49% are higher than on a standard five-year deal but Skipton says it has safeguards in place to make sure borrowers do not pay more than they currently pay in rent.
Low or no deposit products plus high multiples of a person’s income contributed to the collapse of mortgage lender Northern Rock in the aftermath of the 2008 financial crash.
Skipton said it was responding to a gap in the market, with renters having few options to get on the housing ladder.
“Until now there has been no solution for renters to buy a property due to a lack of savings or access to family wealth,” said Stuart Haire, Skipton’s chief executive.
Competition in the mortgage market has been rising even so and according to Moneyfacts there are fifteen no-deposit mortgages currently available.
Lloyds Banking is the UK's largest mortgage lender currently.