16 Jul 2025
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.
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