Lower income thresholds expected to help 10,000 more buyers annually
Nationwide Building Society has eased the income requirements for its Helping Hand mortgage, allowing more first-time buyers to qualify for loans of up to six times their income.
The move comes after the Prudential Regulation Authority (PRA) announced changes permitting lenders to increase high loan-to-income (LTI) lending.
Starting tomorrow, July 16, individuals earning at least £30,000, down from £35,000, and joint applicants with a combined income of £50,000, down from £55,000, will be eligible to apply. Nationwide expects these changes to help an additional 10,000 first-time buyers each year.
The lender, which claims to have supported more first-time buyers in 2024 than any other UK provider, has submitted an application to the PRA to expand its high LTI lending capacity. Most of Nationwide’s high LTI loans are issued through its Helping Hand product, which allows qualified first-time buyers to borrow up to six times their income—about a third more than standard lending limits. Since its launch in 2021, Helping Hand has assisted approximately 60,000 first-time buyers.
Previously, lenders could only offer a limited number of loans at or above 4.5 times a borrower’s income, capped at 15% of new eligible loans, as recommended by the Financial Policy Committee. Nationwide’s earlier income thresholds were set to ensure compliance with this cap amid strong demand. According to the lender, arrears rates on Helping Hand loans are lower than on its standard lending, which it attributes to stricter controls.
Nationwide stated that the revised criteria are intended to support economic growth by enabling more first-time buyers to enter the housing market and by encouraging increased housebuilding. The changes follow the society’s recent decision to raise the maximum loan-to-value on new build houses to 95%.
“The PRA’s announcement unlocks lending for first-time buyers at what remains a difficult time for homeownership,” said Henry Jordan, director of home at Nationwide Building Society. “It has given us the confidence to respond quickly by relaxing our lending criteria on Helping Hand.
“Our changes mean more people, particularly those on lower incomes, could become eligible for a mortgage. We also hope our commitment to further lending provides a boost to the UK’s housebuilding ambitions, as well as encouraging other lenders to increase support for those looking for a home of their own.”
First-time buyers who complete their mortgage with Nationwide receive £500 cashback, with an additional £500 available through the Green Reward scheme for purchasing energy-efficient properties.
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