Analysis reveals significant increase in affordable properties for new buyers due to lending criteria changes
More than 51,000 additional properties would have been affordable to first-time buyers in the past year, according to Leeds Building Society, after recent changes to lending criteria by mortgage providers.
The analysis, based on Land Registry data, shows a 65% increase in the number of homes accessible to new buyers in England and Wales.
This increase follows the Prudential Regulation Authority’s (PRA) decision in July to permit lenders greater flexibility in higher loan-to-income lending. According to the mutual lender, the number of homes affordable to eligible first-time buyers increased from 86,915 to 143,017.
“Affordability remains a challenge for many would-be homeowners, with house prices still outpacing wage growth in several regions,” said Martese Carton (pictured right), director of mortgage distribution at Leeds Building Society. “But brokers should be reassured to know that a £30,000 income is enough to help their clients achieve their homeownership dreams.
“According to our analysis, the number of homes available to buy has increased hugely as a result of affordability changes made across the market. Increasing maximum loan for those earning £30,000 or more means that 65% more properties would have been within reach.”
Rachel Geddes, strategic lender relationship director at Mortgage Advice Bureau, agreed that affordability remains the single biggest hurdle for aspiring homeowners.
“Our research shows 65% of renters aspire to buy, yet a discouraging 27% believe homeownership is completely out of reach,” Geddes said. “The truth is, many aspiring buyers simply don’t realise they’re in a position to get on the property ladder.
“Our job as brokers is to change this narrative and raise awareness of the innovative mortgage products available.”
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