New Nationwide update among ‘big changes’

A mortgage broker has revealed why climbing onto the property ladder could be far more achievable than many people believe.

Despite the prevailing mood of pessimism, the door to homeownership is “open wider than it has been in nearly two decades”, according to one industry expert. A great number of prospective buyers still labour under the assumption that mortgage lenders will only offer loans worth four-and-a-half times their salary.

However, mortgage broker Sarah Fox-Clinch argues that this belief is now well and truly outdated. In recent years, lenders have quietly grown considerably more flexible on both income multiples and deposit requirements, unlocking opportunities for borrowers who may previously have written off homeownership as beyond their means.

Sarah Fox-Clinch, director of Bristol-based mortgage broker Fox Davidson, said many buyers had little idea just how dramatically the mortgage market had shifted.

She said: “The four-and-a-half times income rule used to be the ceiling. It is now much closer to the floor. For a lot of buyers who still think getting a mortgage is impossible, the reality is that the door is open, they are just looking at the wrong door.”

One of the most significant recent developments came from NatWest, which increased its maximum loan-to-income ratio to 6.5 times earnings for joint applicants earning £150,000 or more. This means a couple with a combined income of £150,000 could potentially borrow as much as £975,000, compared to roughly £675,000 under the old four-and-a-half-times model that many borrowers still mistakenly believe to be in place.

And NatWest is hardly the only lender doing so. April Mortgages now provides up to seven times income for borrowers earning at least £50,000, on condition they secure a long-term fixed mortgage.

Teachers Building Society similarly offers seven times income for those working in education, while HSBC, Nationwide and Barclays have all raised lending multiples for certain customers.

Fox-Clinch said: “Lenders have become much more aggressive in how they assess affordability, particularly for higher earners and borrowers with stable incomes. The mortgage market today looks very different from what many buyers remember even a few years ago.”

Deposit requirements have also changed considerably. Lloyds, Halifax and Bank of Scotland recently introduced mortgage products enabling first-time buyers to purchase with deposits as low as £5,000 on properties valued up to £300,000.

Skipton Building Society has been providing its Track Record mortgage since 2023, permitting renters with a solid history of paying rent punctually to potentially borrow the full value of a property without any deposit whatsoever. Fox-Clinch believes numerous people who abandoned buying during the challenging mortgage market conditions of 2023 may now be astonished by what is on offer.

She said: “If someone walked away from a purchase two years ago because the numbers did not work, it is well worth revisiting things now. There are far more options available than many people realise.”

She also cautioned that increased borrowing thresholds and reduced deposits invariably carried heightened financial risk: “Just because somebody can borrow more does not always mean they should. Higher income multiples create larger debts and very small deposits leave borrowers with less protection if property prices fall.”

Fox-Clinch emphasised that affordability should still be considered prudently, especially given continuing uncertainty surrounding inflation and interest rates. However, despite those risks, she maintains the market has become substantially more accessible than public perception indicates.

She added: “The reality is the door to owning a home is open wider than it has been in nearly two decades.”