Relaxed Lending Rules Open Doors for More Buyers

New relaxed lending rules will open doors to homeownership for thousands more borrowers says Enzo Mora CEO and founder of The Mortgage Brain.

The UK’s financial watchdogs have agreed that smaller lenders can now allocate up to 15% of their total lending, capped at £150m, for high loan-to-income (LTI) mortgages. We’re welcoming this positive move as thousands more borrowers will be able to secure a mortgage up to 4.5 times or more their annual salary. The previous limit was £100m set back in 2014. For our customers, this means improved affordability options as larger lenders are also offering great deals. First-time buyers will have access to more income stretching options while still meeting strict affordability checks. Existing homeowners with expiring fixed rates will also benefit from better affordability and greater choice in the market. By working closely with our panel of lenders, we’re ready to help you take full advantage of these changes whether you’re purchasing your first home or looking for a more favourable remortgage deal.

Boost for small deposit buyers

New figures reveal that 90% and 95% mortgages, now making up 19% of all residential loans, have reached their highest level in 17 years, with the widest range of options available in nearly two decades. Many first-time buyers who believed they couldn’t borrow enough to get onto the property ladder are discovering that we’ve been able to secure them an affordable mortgage. It’s always worth speaking with our advisers as we have access to exclusive deals you won’t find on the high street.

House prices edging up

The latest report from Halifax shows that the housing market in 2025 so far has been stable. Since January, prices have risen by less than £600. The downward direction of interest rates coupled with more competitive mortgage deals is encouraging and bringing confidence to the market. Halifax is predicting a slow but steady climb in property prices through the rest of the year although the typical first-time buyer property is bucking that trend, with prices down -0.6% since May, now costing £237,577. A 95% LTV mortgage over 30 years could mean monthly repayments of around £1,179 compared to the average UK private rent of £1,343.

Location still tops reason for buying

TSB has surveyed over 1,000 first-time buyers who had bought a property in the past year and found that compromise and location are key, as three-quarters (75%) of new property owners opted for fewer bedrooms, a smaller property and less outdoor space to buy in a preferred post code. Almost every first-time buyer (96%) surveyed was offered some form of financial help with their deposit, with over two-thirds (68%) receiving help from family members and three fifths (57%) getting a helping hand from friends, which TSB says is an increasing trend. As a result of buying their first home, 45 percent felt financially more secure. Almost two fifths (39%) felt relieved. Overall, the average age of first-time buyers is 32, up from 31 in 2024.

Will Stamp Duty change?

Rumours are circulating over moves for Stamp Duty to be paid by sellers on sales worth above £500,000 and a so-called mansion tax, applying capital gains tax charges on main residence home sold above £1.5m. There have also been calls for buyers to be allowed to spread the cost of Stamp Duty over two to three years after purchase to reduce upfront costs which can be a barrier to moving. We’ll have to wait until the Autumn Budget on 26 November to see if any of these measures are introduced and how the market will react. My view is that as lending continues to grow, we need to catch the momentum, not stifle it and we’re here to make homeownership possible.