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Lending giant Lloyds will now allow first-time buyers to borrow up to 5.5 times their income, in moves to help people onto the property ladder.
The multiple has been increased from a loan-to-income ratio of 4.49.
Based on a household income of £50,000 and a deposit of 10%, this will increase the maximum loan available from £224,500 to £275,000, the bank said.
To qualify, and subject to affordability, customers must apply for a first-time buyer mortgage with Lloyds Bank or its sister brand Halifax, have a total employed household income of £50,000 or more, have a deposit of at least 10% and not be using shared ownership or shared equity schemes.
The bank said it is making £2 billion of lending available to first-time buyers borrowing more than 4.5 times their income.
Aspiring homeowners have been struggling with house prices rising faster than their wages— Andrew Asaam, Lloyds Banking Group
Andrew Asaam, homes director at Lloyds Banking Group, said: “Getting the keys to a first home is a big deal, but it’s tough right now.
“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.”
Toby Leek, NAEA (National Association of Estate Agents) Propertymark president, said: “It is encouraging to see banks offering help to first-time buyers at a time when many continue to struggle to take their first step onto the housing ladder, and it will be interesting to see what long-term benefits this scheme may generate.”
