"If we are to come anywhere close to meeting the Government’s ambitious housing supply targets, lenders stepping up to the plate and supporting first-time buyers will be essential."
As we begin a new year and look ahead to what 2025 may bring, I am hugely optimistic for the difference we can make for aspirational homeowners.
It is set to be a busy year in the mortgage market, with changes to stamp duty relief coming in at the end of the first quarter and further base rate reductions anticipated. And while recent years have taught me to expect the unexpected, it's fair to say that things are starting to look up for aspiring first-time buyers.
Over recent years, a toxic combination of historically high house prices, the increasing cost of living, limited housing stock and higher interest rates has made it difficult for borrowers.
To help aspirational homeowners overcome these obstacles, we recently announced the launch of Income Plus - a range of new mortgages aimed at first-time buyers with a minimum household income of £40,000 enabling them to borrow up to 5.5 times their earnings. Together with improvements in how we assess affordability, we estimate these mortgages will increase the maximum we can offer a first-time buyer by £66,000 compared to our standard mortgages – a figure that we are extremely proud of, and a tangible example of the benefit that changes made by lenders can have on individual borrowers.
We’ve made adjustments to our affordability model to give a more realistic view of what borrowers can afford to repay every month to give first-time buyers a better chance of getting a foot onto the property ladder.
Putting homeownership within reach of more people, generation after generation, is what drives us at Leeds. We feel strongly that everyone deserves a place to call home, which is why we’ve tackled one of the main barriers facing would-be homeowners whose earnings are being outstripped by house prices and making saving a large deposit even harder.
The launch of Income Plus and other improvements we’re making will come as welcome news for many of our intermediary partners across the UK who work hard to support the increasing number of first-time buyers facing affordability constraints. Understanding the pressures the intermediaries are facing, we are proud to launch our new product along with a dedicated affordability calculator to make supporting the needs of their clients as straightforward as possible.
We continue to push the Government to increase the supply of homes for first-time buyers. We hope Income Plus being available up to 95% loan to value on new build houses will give further confidence to developers that lenders are supporting aspiring homeowners to overcome affordability challenges. If we are to come anywhere close to meeting the Government’s ambitious housing supply targets, lenders stepping up to the plate and supporting first-time buyers will be essential.
The purposeful action we take now will pave the way for future homeowners, and we hope that more lenders will come up with solutions to support more first-time buyers, and further bolster the future of the housing market.
