Lloyds offers first-time buyers mortgages at 5.5x income.

Lloyds Banking Group has taken a significant step to support first-time buyers by making £2 billion of lending accessible, allowing prospective homebuyers to borrow up to five and a half times their income. The current economic climate, marked by escalating house prices, mounting living costs, high interest rates, and affordability concerns, has presented the most challenging conditions for first-time buyers in 70 years. Shockingly, statistics suggest that over half of first-time buyers, standing at 54%, now require a loan exceeding 4.5 times their income, a figure that soars to a staggering 80% in London.

Under the initiative titled the First-time Buyer Boost, facilitated through Lloyds Bank and Halifax, Lloyds Banking Group aims to facilitate more individuals in realising their dream of homeownership. The recent enhancement in the loan-to-income ratio from 4.49 to up to five and a half times income signifies the institution’s commitment to easing the burden on aspiring homeowners.

For instance, predicated on a household earning £50,000 with a 10% deposit, the maximum loan available has seen an increment from £224,500 to £275,000, as confirmed by the bank. To be eligible for this extended borrowing capacity, customers must meet specific criteria, including applying for a first-time buyer mortgage with either Lloyds Bank or Halifax, sustaining a combined household income of £50,000 or above, possessing a minimum 10% deposit, and refraining from utilising shared ownership or shared equity schemes.

Expressing his thoughts on the initiative, Andrew Asaam, the homes director at Lloyds Banking Group, articulated, “Securing a first home is a significant milestone, particularly in the current challenging circumstances faced by many.”

Toby Leek, the president of NAEA Propertymark, commended the move, stating, “It is heartening to witness banks extending support to first-time buyers at a juncture where many encounter obstacles in embarking on their homeownership journey. The long-term impact of this scheme remains to be observed, but what is crucial at this stage is the imperative nature of constructing more homes in order to keep pace with escalating demand. Eventually, this will lead to a decrease in property prices, rendering homeownership more attainable for all.”