Skipton’s recently released 100% LTV first-time buyer mortgage has certainly made big waves in the mortgage industry and for good reason. Its use of rental payments to judge the creditworthiness of the borrower is truly innovative, and it not requiring a guarantor opens the product up to much more of the market than similar products have done in the past. 

Of course, there are limitations to the product, but it has brought massive mainstream attention to the first-time buyer conversation and serves to demonstrate this industry can be flexible and forward-thinking. 

It also offers a chance to signpost Hopeful Homeowners who don’t qualify for Skipton’s offering to other first-time buyer schemes that may yet serve them well. 

As part of our Affordable Home Ownership proposition, Pepper Money provides a suite of products that support a number of first-time buyer schemes, including Shared Ownership, Right to Buy, and now, First Homes. 

Shared Ownership allows a first-time buyer to purchase between 25% and 75% of a home, with the rest being owned by a housing association. The buyer pays rent on the proportion of the house they don’t own, but a greater share of the house can be bought over time in a process known as staircasing. Assessing if somebody is suitable for this scheme revolves around the affordability calculation, which is where a specialist lender that can consider different sources of income comes into its own. 

Right to Buy allows a council home tenant to buy the property they live in at a  significant discount. Research we conducted alongside YouGov found that over half of people who rent their home from a local authority or housing association would consider using Right to Buy.  

Lastly, the First Homes scheme provides discounts of at least 30% on new build properties, with this increasing to 50% under some local authorities. Potential buyers must be able to raise at least half the price of the home through a mortgage. 

None of these schemes are a magic bullet for the issue England has with getting people onto the housing ladder, but the simple fact is that they have succeeded in putting door keys into the hands of many thousands of people over the years. 

However, with so many high street lenders tightening their credit scoring and squeezing debt-to-income ratios, we now risk closing off opportunities to people who could have otherwise taken advantage of these schemes. 

This is where Pepper Money can help. We do not credit score, so we can consider poor scores and wobbly credit files. We also look at each case individually, allowing us to be more flexible on debt-to-income ratios. And we consider many income types, including that garnered from contractual work, bonuses and overtime, and self-employment, broadening our offering to even more Hopeful Homeowners. 

Only by lenders, brokers, and institutions working in synch can we get more people into their first home. We believe our Affordable Home Ownership Proposition is a useful blueprint for bringing these elements together. 

Ryan Brailsford Pepper Money


Ryan Brailsford
Director of Business
at Pepper Money