Boost for First-Time Buyers as ‘Mortgage Lending Reins Loosened’
GREATER LONDON, ENGLAND, JUL 9 – The Bank of England permits lenders to exceed 15% individual high loan-to-income mortgage limits, potentially helping 10,000 more first-time buyers annually, while maintaining a 15% aggregate cap.
- The Prudential Regulation Authority relaxed the 15% cap on new high loan-to-income mortgages, allowing lenders more flexibility from 2025 onward in the UK housing market.
- This change follows a Financial Policy Committee recommendation to permit some lenders to exceed the 15% LTI cap without raising overall system risk while keeping the aggregate limit at 15%.
- Nationwide, the UK’s largest building society, welcomed the announcement and anticipates that schemes like Helping Hand, introduced in 2021, will allow it to support approximately 10,000 additional first-time homebuyers each year.
- The share of mortgages with LTI ratios over 4.5 rose to 9.7% in early 2025, while the Bank of England noted unused capacity equivalent to 36,000 high-LTI first-time buyer mortgages per year.
- The adjustment aims to improve first-time buyer access without increasing financial risks, supporting economic growth and housebuilding ambitions while the PRA plans to consult on permanent rule changes.
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The VVD party proposes allowing first-time buyers to save tax-free for their first home purchase. Participants in the proposal are divided on this plan. Just over half consider this a good way for young people to secure a home.
·Amsterdam, Netherlands
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Boost for first-time buyers as ‘mortgage lending reins loosened’
One mortgage expert said the Bank of England had made a ‘welcome and pragmatic move’.
·London, United Kingdom
Read Full ArticleThe UK Prudential Regulatory Authority (PRA) is going to review the requirements in the granting of mortgages considered to be risky, which means...
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R 22%
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