Political uncertainty doesn’t seem to be deterring first-time buyers, and getting a mortgage could be getting easier due to a new partnership between Nationwide and CreditLadder.
The first-time buyer market has certainly been given a boost by Help to Buy, and Shared Ownership schemes and increasing competition between lenders has resulted in first-time buyers benefiting from smaller deposits (15% compared to 20% in 2009), less fees and securing lower rates.
Last year 370,000 new first-time buyer mortgages completed, the highest for 12 years, and according to UK Finance, over 25,000 first-time buyers took out a mortgage in January this year; 4.6 times more than in the same month last year.
There seems to be no abating the efforts of lenders to attract first-time buyers to their books, and the latest development by Nationwide could be a game-changer for many prospective buyers.
First partnership between a mortgage provider and rent reporting service
Nationwide and rent reporting agency CreditLadder has joined forces to help make buying a home even more accessible for first-time buyers. Their partnership comes following changes last year designed to help tenants use their regular rent payments to get on the housing ladder by improving their credit scores.
Until October 2018, paying regular rent didn’t affect your credit score because rent is not a form of credit. This has always been a major source of frustration for young people in particular, where rent is usually their biggest outgoing and lenders would not acknowledge reliable and regular rent payments as evidence that they would make responsible borrowers.
Now prospective first-time buyers who are registered with CreditLadder to use their rent payments to improve their credit scores, are automatically assessed to see if they meet Nationwide’s qualifying criteria.
Customers who do meet the criteria will be advised that they could be accepted for a Nationwide mortgage. While there’s no guarantee that their application will be approved, the partnership means that if you don’t qualify you will get regular checks to see if your circumstances have changed and whether they could make a difference to your application outcome.
Sheraz Dar, CEO of CreditLadder said: “With the service already live, the relationship is the first of its kind between a rent reporting service and a mortgage provider in the UK. Working with Nationwide Building Society is a key plank in our plans to help those who dream of owning their own home to realise their aspirations.”
