Getting on the property ladder could become a little easier for some first-time buyers thanks to a new change from Lloyds Banking Group.
Lloyds Bank has announced that it will reduce the minimum household income needed for its First Time Buyer Boost Scheme. The scheme allows first-time buyers to borrow up to 5.5 times their yearly household income with a 10% deposit or more. The usual income multiple for a mortgage is between 4x and 4.5x the applicant’s salary.
The scheme itself isn’t new, so what’s the change? Households previously needed to earn at least £50,000 per year to qualify for the scheme. From December, this will drop to £40,000, opening the door for more aspiring homeowners.
The lender says that this boost will bring an extra £1bn of potential lending into the market for first-time buyers.
Support for the self-employed
Self-employed first-time buyers often face stricter lending criteria, but Lloyds’ changes will also apply to them. They will now have access to the same 5.5 times income lending as employed applicants, helping level the playing field for buyers with smaller deposits.
Since launching in August 2024, Lloyds says that the FTB Boost scheme has helped more than 15,000 buyers, with over £8 billion in lending already pledged. The new £1 billion commitment takes the total to £9 billion dedicated to helping people purchase their first home.
“‘We understand the difference this can make to first-time buyers,” says Andrew Asaam, Homes Director at Lloyds Banking Group. “We’re really pleased to be able to offer what they need in a responsible and sustainable way. We are making better lending decisions for those who can genuinely afford to borrow more.”
This will apply to Lloyds Bank and Halifax (owned by Lloyds Banking Group), and the change will come into effect from 5 December 2025.
To discuss your mortgage options, speak with us at MB Associates.