By Metro Lifestyle Reporter

Copyright metro

Homes valued up to £173,000 are now within reach (Picture: Getty Images)

Recent amendments to mortgage affordability regulations have increased the number of homes accessible to first-time buyers, thanks to relaxed lending criteria and product innovations.

According to an analysis by Leeds Building Society, which used retrospective Land Registry data from the year to July 2025, approximately 51,000 additional properties have become affordable under the new lending criteria — marking a 65% rise from previous limits.

The data reveals that 143,017 homes would have been within reach with the updated rules, compared to 86,915 beforehand.

At the heart of these developments are amendments to the loan-to-income (LTI) flow limit rules announced by the Prudential Regulation Authority (PRA) in July 2025.

What has changed?

Previously, mortgage lenders could issue only a limited proportion — capped at 15% — of mortgages with high LTI ratios (the amount you borrow relative to your income).

This cap was designed to keep lending prudent, but also restricted accessibility for many first-time buyers.The PRA’s new approach grants lenders greater discretion to extend mortgages with higher LTI ratios.

By relaxing the cap, lenders can now provide more high LTI loans, helping more buyers qualify for homes that were previously beyond their financial reach.

Buyers can now qualify for homes that were previously beyond their financial reach (Picture: Getty Images)

Leeds Building Society’s analysis reveals that these adjustments have made an extra 51,000 homes affordable to first-time buyers — an increase of 65% compared to prior lending rules.

This means many homes valued up to around £173,000 are now within reach for borrowers whose income previously would have restricted them to properties around £141,000.

How are lenders responding?

Leeds Building Society has lowered its minimum household income requirement for high LTI mortgages from £40,000 to £30,000.

This change allows applicants earning £30,000 annually to borrow up to £165,000 — up from prior limits — making homes valued up to £173,000 attainable rather than the former £141,000 threshold.

Furthermore, Leeds reduced its mortgage stress testing rate to ease borrowing capacity.

Applicants with lower household incomes have access to more homes (Picture: Getty Images)

The society has also rolled out specialised mortgage products, including the Income Plus range, which targets first-time buyers and permits borrowing up to 5.5 times the borrower’s income (compared with a standard 4.5 times), and the Reach range, designed for those with lower credit scores.

Meanwhile, Nationwide has shaken up the salary thresholds for its Helping Hand mortgage, meaning those who are eligible will be able to apply with a £30,000 salary – down from £35,000 – while joint applicants can apply with a £50,000 (also down £5,000).

These innovations aim to accommodate a broader range of financial circumstances and credit profiles, increasing homeownership opportunities.

Industry professionals acknowledge these developments as positive, but underline ongoing challenges.

New here? Sign up for The Key newsletter

Hello! I’m Rachel Moss, Metro’s lifestyle editor.
Whether you’re renting, buying, or just dreaming, our weekly property newsletter is packed with expert tips, housing hacks, and the best (and most bonkers) homes on the market.

Rachel’s team brings you the latest in property, travel, money and much more

Recently, we wrote about a women-only commune, why London’s fanciest houses are opening their doors to visitors and buying a home through shared ownership.
Sign up now.

Martese Carton, director of mortgage distribution at Leeds Building Society, said: ‘Affordability remains a challenge for many would-be homeowners, with house prices still outpacing wage growth in several regions.

‘But brokers should be reassured to know that a £30,000 income is enough to help their clients achieve their homeownership dreams.’

Meanwhile, Rachel Geddes, strategic lender relationship director at Mortgage Advice Bureau, points out that although over 65% of renters express interest in purchasing a home, many view homeownership as unattainable.

‘The truth is, many aspiring buyers simply don’t realise they’re in a position to get on the property ladder,’ she explains.

‘Our job as brokers is to change this narrative and raise awareness of the innovative mortgage products available.’

Broader regulatory background

These July reforms by the PRA complement earlier proposals from April 2025, which sought to raise the threshold for LTI flow limits from £100 million to £150 million.

The intended effect was to permit smaller lenders a greater capacity to issue higher LTI mortgages without hitting restrictive regulatory caps. This is designed to stimulate competition and expand borrower choice.

Collectively, these regulatory changes reflect a strategic effort to balance sound lending practices with improved accessibility for first-time buyers amid continuing affordability pressures.But despite these advancements, the housing market remains challenging.

Regional disparities persist, with some areas witnessing house price growth well beyond income increases.

However, the greater lending flexibility now provides many potential buyers with a tangible opportunity to consider homes previously out of reach.