Big Changes for First-Time Buyers: What the Chancellor's Mortgage Reforms Mean for You

The government is introducing mortgage reforms to boost homeownership, stimulate economic growth, and make the housing market more accessible, especially for first-time buyers.

Chancellor Rachel Reeves has announced the most significant mortgage reforms in over a decade—great news for those dreaming of homeownership.

Borrow More with Less Income

Previously, lenders capped mortgages at around 4.5 times your salary. Now, more borrowers will be allowed to go beyond that limit as lenders can apply to discard this cap. This reform could unlock up to 36,000 additional mortgages for first-time buyers this year.

Support for Lower-Income Buyers

Nationwide’s “Helping Hand” mortgage—allowing borrowing up to six times income—is now available for those earning £30,000 (formally £35,000). For joint applicants, the combined income threshold dropped to £50,000. This change could help 10,000 more buyers annually.

Mortgage Guarantee Scheme Goes Permanent

The government’s Mortgage Guarantee Scheme (which supports lenders when offering mortgages with a 5% deposit) is now here to stay. It gives lenders more confidence, making it easier to get high loan-to-value mortgages.

Rent Payments Count Too

For the first time, rental history may be considered in mortgage decisions. If you've consistently paid rent on time, it could strengthen your case for affordability, even if your salary isn’t high.

These updates are designed to make buying a home more achievable, especially for those facing income or deposit hurdles. A bold move to give more people a fair chance at stepping onto the property ladder.

Recent posts

Mortgage lenders are starting to recognise their “Green” responsibilities when it comes to the different products they offer. 

A recent study by Boon Brokers where 1,000 people who had used an estate agent over the last year were surveyed, showed that a whopping 52% said they were pressured into using the estate agents’ in-house mortgage broker.

Analysts are predicting further rate cuts this year, with the next one possibly coming down to 4% when the Bank of England’s Monetary Policy Committee meet on Thursday 7th August 2025.

The Financial Conduct Authority (FCA) has shared new changes to mortgage rules with the aim to simplify remortgaging, and encourage competition within the mortgage market.

Lloyds Banking Group has jumped on the bandwagon to boost lending for first-time buyers as they allocate an additional £4 billion to help first-time buyers on to the property ladder.

As the Loan to Income (LTI) cap has been increased to 5.5 times income, applicants who fit the First Time Buyer Boost criteria could borrow up to 22% more. 

Nationwide ease their ‘Helping Hand’ mortgage designed to help first-time buyers get onto the property ladder by allowing them to borrow up to six times their income.

 

Keeping the kids entertained over the six-week summer holidays isn’t always easy, especially with the cost-of-living making it even more difficult. Below is a list of fun, inexpensive ideas to do over the break

The Financial Conduct Authority (FCA) has published a discussion paper about the future of the mortgage market in a bid to improve access for first -time buyers, self-employed, and those borrowing in retirement.