Lloyds Banking Group has made £2bn available to first-time buyers (FTBs) borrowing more than 4.5-times their income, in a bid to help more people get on the housing ladder.
Rising house prices, living costs, high interest rates and affordability challenges mean conditions are the most difficult in 70 years for first-time buyers.
According to some estimates, more than half of FTBs (54%) now need a loan of more than 4.5-times their income, rising to 80% in London.
The First-time buyer boost from Lloyds Banking Group is a step in the group’s efforts to help more customers buy their own home.
The initiative includes an improved loan-to-income (LTI) multiple for all eligible FTBs from 29th August 2024.
This allows them to borrow up to 5.5-times their household annual income, up from 4.49-times.
Based on a household income of £50,000 and a deposit of 10% this will increase the maximum loan available from approximately £224,500 to £275,000 (a 22% increase).
To qualify, and subject to affordability, customers must apply for a first-time buyer mortgage with Halifax or Lloyds Bank, have a total employed household income of £50,000 or more, have a loan-to-value (LTV) of up to 90%.
Those buying a house through Shared Ownership or Shared Equity will not be eligible.
The offer is available across all channels, including phone, online, branch and through intermediaries.
There are no processing changes or additional steps for mortgage brokers and mortgage advisers to deal with, applications can progress as usual.
Andrew Asaam, homes director at Lloyds Banking Group, said: “Getting the keys to a first home is a big deal, but it’s tough right now.
“Aspiring homeowners have been struggling with house prices rising faster than their wages. They need to save for a deposit, keep up with rent, and choose the right mortgage.
“Becoming a homeowner is one of the most fundamental things you can do to secure your long-term financial future, but it’s not easy.
“First-time Buyer Boost aims to make this journey easier by helping people make their income go even further.”
