Key figures from leading banks and mutuals to meet at Treasury over lending reforms
The City minister, Lucy Rigby, will today convene senior representatives from the UK’s major banks and building societies, urging them to utilise recently relaxed lending criteria to support first-time buyers.
Rigby, who assumed the role of Economic Secretary to the Treasury following Emma Reynolds’s move to Environment Secretary in the latest Cabinet changes, will be joined by housing minister Matthew Pennycook for the discussions. Rigby’s remit as City minister covers financial services policy and regulation.
The ministerial reshuffle followed the resignation of Angela Rayner, the former deputy prime minister and housing secretary, amid questions regarding her payment of property tax.
The meeting will focus on encouraging lenders to prioritise first-time buyers and to implement measures introduced in the “Leeds reforms” announced in July. These reforms permit banks and building societies to offer mortgages at up to 4.5 times a buyer’s income, a move Labour estimates could generate as many as 36,000 additional loans for first-time buyers within the first year.
Further proposals under consideration include a review of Financial Conduct Authority rules, which may allow timely rent payments to be used as evidence of affordability for mortgage applicants.
Executives from Barclays, Lloyds, HSBC, NatWest, Nationwide Building Society, and the industry group UK Finance are expected to attend the Treasury meeting.
In related news, Newcastle Building Society has announced the rollout of a mortgage product aimed at first-time buyers who are not receiving financial support from family members.
The lender’s criteria specify that deposits must be sourced from the applicant’s own savings, with no cash gifts or third-party loans permitted. The product offers loans up to £350,000, requiring a minimum deposit of £5,000 or 2% of the property’s value, whichever is greater. The mortgage is available on a five-year fixed rate of 5.25% over a term of up to 35 years.
“First-time buyers continue to face real challenges with rising house prices, higher rental costs and the cost of living,” said Ben Smith, mortgage manager at Newcastle Building Society.
“It’s especially difficult for those who don’t have access to the Bank of Mum and Dad. That’s why we’ve launched this mortgage to give more options to those who have worked hard to save and have built a deposit by themselves.”
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