Yorkshire Building Society’s £5k Deposit Mortgage is now available to first-time buyers purchasing a flat, in a move designed to expand access to homeownership.
The product, which allows borrowers to buy a property worth up to £500,000 with a deposit of just £5,000, is available both directly from the Society and through its intermediary lending arm, Accord Mortgages, via mortgage brokers.
The lender said the expansion follows feedback from brokers and customers and aims to enhance the eligibility criteria of the mortgage. All other terms and conditions will remain unchanged.
Yorkshire Building Society originally launched the product in March 2024 and has since seen strong demand, with hundreds of first-time buyers benefiting. While the Society did not expect the mortgage to suit all first-time buyer circumstances, it has received a steady stream of interest since its introduction.
Ben Merritt, director of mortgages for the Society, said: “We’re absolutely delighted with the impact this product has had – our teams have been overwhelmed by the very human stories illustrating the difference it has made to people’s life plans. In fact, it has reminded us of why we exist, and the fact a house is so much more than just bricks and mortar.
“Expanding its reach to include flat purchases is the natural next step and we’re really pleased to be able to respond to feedback by offering this additional opportunity for would-be first-time buyers to benefit.
“Our analysis suggests this change will particularly benefit people in city centre locations in areas like London, the South-East and parts of Scotland, where property prices tend to be higher and flats are therefore a popular choice.”
The Society launched the first-of-its-kind £5k Deposit Mortgage after its research found that raising the typical 10% deposit on a £200,000 first-time buyer home was the biggest barrier to homeownership due to historically high house prices.
This latest enhancement reaffirms its commitment to supporting first-time buyers. Research for its Home Truths Report in 2023 found that 78% of aspiring homeowners feel homeownership is becoming an elite privilege. Further research in 2024 revealed that 59% of first-time buyers are at risk of giving up on homeownership altogether due to financial worries, while 41% cite the high cost of living as a key concern. The Society also found that those forced to rent for life could be £2.6m worse off.
