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No deposit, no problem: the new 100% mortgages for first-time buyers
More UK lenders are offering mortgages requiring only a small deposit, or none at all, as banks and building societies relax affordability rules to help first-time buyers onto the property ladder. Metro Bank has become the latest high street lender to offer a deal allowing eligible first-timers to borrow up to 100% of a property's value, following a similar move by Lloyds, in a revival of a type of lending largely abandoned after the 2008 financial crisis.
Lloyds' deal, launched in May, requires a minimum deposit of just £5,000 (a loan-to-value just over 98%) at 5.89% on a five-year fix, but is capped at properties worth £300,000, limiting its use in pricier areas. Santander offers up to 98% loan-to-value at 5.49% on homes up to £500,000 with a £10,000 minimum deposit, while Skipton and Yorkshire building societies allow borrowing up to 100% and 99% respectively, aimed particularly at renters. Brokers also note growing availability of "joint borrower, sole proprietor" mortgages, which let a relative or friend's income boost affordability without giving them legal ownership, though all named borrowers remain jointly liable for repayments.
In short
- Metro Bank joins Lloyds in offering 100% mortgages for first-time buyers.
- Santander, Skipton and Yorkshire also offer low- or no-deposit deals.
- Joint borrower, sole proprietor loans let others boost your borrowing power.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
First-time buyers face unprecedented affordability barriers, with deposit requirements pricing many entirely out of the market despite stable employment and income. High loan-to-value mortgages, with modern regulatory safeguards and stricter underwriting standards than pre-2008, can expand genuine access to homeownership and help people build wealth through property rather than losing money to rent. The economic and social case for enabling responsible lending to creditworthy borrowers is compelling, particularly given the real hardship caused by deposit requirements.
The case against
These products reintroduce the high-leverage lending that destabilised the financial system before 2008, creating concentrated risk if property values fall or economic conditions deteriorate. Borrowers with zero equity bear maximum vulnerability to negative equity and default, whilst lenders face higher historical loss rates on such mortgages. Rather than solving affordability, unlimited lending may simply inflate house prices further, making underlying problems worse whilst increasing systemic fragility during economic downturns.
Explained simply
Buying a home in Britain has become increasingly difficult for first-time buyers, particularly in areas where property prices have risen faster than wages. A key obstacle is saving enough for a deposit, which traditionally requires 15 to 20 per cent of a property's value and can amount to tens of thousands of pounds.
Mortgage lenders are now responding by offering deals that require only minimal deposits, or none at all, allowing eligible first-time buyers to borrow up to 100 per cent of a property's value. This means a buyer could theoretically purchase a home without having saved anything upfront, though they would still need to meet other requirements such as proving they can afford the monthly repayments. Lenders are also introducing other arrangements like "joint borrower, sole proprietor" mortgages, where a friend or relative's income helps demonstrate affordability without them having legal ownership of the property.
These products had largely disappeared after the 2008 financial crisis, when low-deposit lending and other factors contributed to a major housing market collapse. Their reintroduction by major banks and building societies now represents a significant shift in lending practices, as economic circumstances have changed and lenders reassess what risks are acceptable.
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