Developers and lenders are working together to help London renters become homeowners without needing a deposit, according to Foxtons.
This comes as the Government did not announce any new support for first-time buyers (FTBs) in the latest Budget.
The research showed that the average cost of renting in London was £2,736 a month, making it hard for renters to save for a deposit.
Developers have started offering ‘Track Record’ mortgages for new-build homes, allowing eligible buyers to purchase with 0% deposit.
A ‘Track Record’ mortgage means buyers can get up to 100% loan-to-value (LTV) if they have not owned a property in the last three years.
Applicants aged 21 or over must show at least 12 months’ rent payment history from the last 18 months.
Some lenders will allow mortgage payments up to 120% of the applicant’s current rent, with terms of up to 40 years and borrowing up to five times income.
Developers are also contributing deposits of up to 5% to help buyers take their first step onto the property ladder.
These offers are available on both new-build houses and flats in London.
Joel Ellis-Duffy, sales director – new homes at Foxtons, said: “The partnership between developers and lenders is opening the door for a new generation of London homeowners.
“For many renters, saving for a deposit has been the single biggest obstacle to buying, despite a consistent history of paying rent that often matches or exceeds potential mortgage repayments.
“No-deposit mortgages acknowledge that reliability, allowing renters to redirect what they’re already spending into a home of their own.”
Ellis-Duffy added: “For developers, who are also offering support with deposits of up to 5%, it’s a fantastic way to expand their pool of potential buyers and help more Londoners realise their ambition of home ownership.
“With these products now available across both new-build houses and flats, there’s a real opportunity for renters to take that step onto the ladder sooner than they might have thought possible.”
