Flexible product combines incomes to help unlock homeownership opportunities
This article was produced in partnership with Skipton Building Society
The third iteration of Skipton Building Society’s Group Home Affordability Index* spotlighted a stark reality. It found that living with parents is no longer enough for first-time buyers to save – with 98% of adults unable to buy the average first-time buyer home in their local area, based on their own financial situation, and, over 90% would spend more than 45% of their income on essential housing costs. These statistics made Derek Adams, Senior National Accounts Lead at Skipton, sit back and think.
“I’ve been guilty myself of thinking all they need to do while living back home is pull their belt in a little bit, and presto they’ll have a deposit. But several studies fly in the face of that common assumption. It isn’t the glib, ‘give up the avocado on toast and you’ll be able to afford a home.’ There are various factors at play — inflation, cost of living, maintaining a home — and unfortunately, no silver bullet to address them all.”
Market conditions are stagnating
The index’s previous findings, including both short-term trends and the baseline from 2020, indicate that home affordability has not improved for first-time buyers. While overall conditions have stayed relatively level, calling the situation stable is misleading. The latest Skipton Group Home Affordability Index report uses the term “stagnating” to reflect the ongoing challenges for this age-old problem, which is a better reflection of the reality, Adams points out.
He speaks a lot to brokers about first-time buyers, including about his own experience with his first home. He encourages the audience to keep tally marks of how many times he sounds like his dad as he recalls interest rates at 14% and the bank happily lending him 100% of his modest purchase price. While Adams did feel much of his monthly income went to the mortgage, it’s been shown across various studies that now is the hardest time for first-time buyers in the last 17 years.
A more active, buoyant housing market requires collaboration across industry stakeholders including lenders, policy makers, and developers. Skipton remains steadfast in its mission to get more people owning their own home.
“You might argue it's all relative, but actually first-time buyers are really feeling unprecedented stress around deposit and affordability,” Adams says. “The good thing about the market is there are a number of lenders — ourselves included — dedicated to innovative solutions.”
Enter the Income Booster
Skipton has several innovative products which could help address first-time buyer challenges. These solutions are seen as innovative because they respond directly to real-world barriers identified through broker feedback.
Notably, the Delayed Start mortgage allows new buyers to defer their mortgage repayments for the first three months (but interest does accrue from day one). This option made a big splash, Adams notes, and is helpful for those facing overlapping rental and mortgage costs or other upfront expenses. Another product, the Track Record mortgage, was designed for renters who can demonstrate a recent consistent history of paying rent. First capped at 100% of their rent payments, the product was later enhanced — based on broker feedback eager to broaden accessibility — to allow mortgage payments up to 120% of previous rent.
While these propositions won’t suit every first-time buyer, at least brokers can reach for them when the situation calls for it. Adams says brokers are appreciative of Skipton’s willingness to try new things and points to Income Booster (Joint Borrower, Sole Proprietor) as one of the standouts in the lender’s arsenal.
Income Booster allows your client to add up to three additional applicants onto the mortgage, from family members to friends, to combine incomes to increase borrowing power for a first-time buyer. Adams knows the value of the product firsthand: “I've done my own little scientific study because I used it for my son when he was in the market for his first home and it was a real help,” he recalls.
Adams’ son had left university poised to get a job in his field and engaged to be married, so his household income was on track to increase over the next few years. But eager to get into his first home sooner than later, he didn’t have the necessary income. Adams and his wife went on the application with their son on a two-year fixed, and were able to come off at the end of the term as their son passed the relevant affordability checks and eligibility criteria on his own.
“It was ideal for my particular situation,” Adams says, noting the good news is a number of lenders offer a similar proposition.
A key challenge for lenders is that both first-time buyers and their parents who are seeking to support them on these applications, are getting older. This can lead to restrictions on the length of mortgage terms based on the age of the oldest applicant. Skipton stands out in its flexibility because rather than applying blanket age limits, “we’re a bit more agile,” Adams says.
This approach is designed to better reflect on-the-ground situations where supporters may only need to be on the mortgage for a short period, as in Adams’ personal experience. He notes that savvy brokers leverage products in innovative ways as well. For example, “turning Income Booster on its head” and using adult children to support a parent’s application.
“That wasn't our idea when we set it up, but there's nothing to stop that scenario being used as well,” Adams says.
Making homeownership a realistic goal: The work continues
That kind of creativity illustrates the need for brokers to not only explore all available options but thoroughly understand how each works. Skipton published a podcast that highlights the lender’s signature agility, showcasing how various propositions can be adapted to suit complex, real-world scenarios brokers encounter.
“We hear a lot, ‘I didn’t know you could adapt that product to do that,’” Adams says. “It may be a double-edged sword in that there are a lot of propositions out there, but for the brokers dedicated to figuring out to use them to fit prospective borrowers, there’s a lot of opportunity.”
The Affordability Index forecasts only marginal improvement in affordability in the next few years, and Skipton continues to work closely with stakeholders to find new ways to make homeownership a realistic goal for first-time buyers. Much of the lender’s recent innovation stemmed from discussions with brokers, and Skipton is serious about leaning on those opinions to shape current and future offerings.
“First-time buyers are important to everyone but for brokers, they’re their lifeblood,” Adams says. “We're helping to get new clients through the door so they become clients brokers keep for years to come.”
Subject to eligibility and lending criteria.
Derek Adams
Senior National Accounts Lead
Skipton Building Society for Intermediaries
For intermediary use only.
These views are Derek’s own.
*Skipton Group Home Affordability Index 2025.
The Skipton Group Home Affordability Index is not a benchmark for the purposes of UK Benchmark Regulation, nor for the purposes of any other legislation or regulation. The Skipton Group Home Affordability Index is produced for information purposes only and must not be used or relied upon for commercial purposes including any decisions and/or advice. Skipton Building Society is not responsible for any decisions made based on this information.
