The Chancellor, Rachel Reeves, has announced major changes to mortgage lending rules as part of the Government’s wider reforms to boost homeownership.
These changes could open the door for more first-time buyers, but only if you understand what is really on offer.
More mortgage, lower income
The key change is around income multiples. Banks and building societies are now encouraged to offer more mortgages at over 4.5 times a buyer’s income.
Nationwide is the first to respond, lowering the salary required for its Helping Hand mortgage, from £35,000 to £30,000 for single applicants, and from £55,000 to £50,000 for joint ones.
This means around 10,000 extra people each year could get access to a mortgage. If you are just under the threshold, you may now qualify.
Borrowing more does not always mean better
While this appears helpful, it also increases the risk of overstretching.
Higher borrowing may mean higher repayments, especially if interest rates change.
First-time buyers need to consider what is affordable over the long term, not just what a lender is willing to offer today.
Advice matters more than ever
Our financial advisers can help you:
- Understand what these changes mean for your situation
- Explore mortgage options beyond the headline offers
- Build a realistic budget for buying your first home
A mortgage is likely the biggest financial commitment you will make; get the right guidance from the start.
