Bank makes £2 billion available for first-time buyers borrowing over 4.5 times their income
Aiming to provide additional support to those looking to enter the property market, Lloyds Banking Group has announced an increase in borrowing limits for first-time buyers.
The high street lender is making £2 billion available through Lloyds Bank and Halifax to assist first-time buyers seeking loans of more than 4.5 times their income.
The new scheme, called First-time Buyer Boost, is available immediately. It will allow eligible first-time buyers to borrow up to 5.5 times their household annual income, an increase from the previous cap of 4.49 times.
The increase is expected to help those currently facing affordability challenges. For example, on a household income of £50,000 with a 10% deposit, the maximum loan available will increase from approximately £224,500 to around £275,000, a 22% rise.
To qualify for Lloyds’ First-time Buyer Boost, applicants must meet the following criteria:
- 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) ratio of up to 90%
- Not be using Shared Ownership or Shared Equity schemes
The offer will be available through all channels, including phone, online, branches, and intermediaries. Mortgage brokers and advisers will not need to adjust their processes, as applications can proceed as usual.
Lloyds Banking Group, the UK’s largest mortgage lender, lent £12 billion to first-time buyers in 2023 alone. Still, with house prices, living costs, and interest rates on the rise, the affordability challenges facing first-time buyers are at their highest in 70 years. Recent estimates also suggest that over half of first-time buyers now require loans exceeding 4.5 times their income, with the figure rising to 80% in London.
“Getting the keys to a first home is a big deal, but it’s tough right now,” said Andrew Asaam (pictured), homes director at Lloyds Banking Group. “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.”
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