Boost for first-time buyers as Lloyds allows borrowing of up to 5.5 times income

Lending giant Lloyds will now allow first-time buyers to borrow up to 5.5 times their income, in moves to help people onto the property ladder.

The multiple has been increased from a loan-to-income ratio of 4.49.

Based on a household income of £50,000 and a deposit of 10%, this will increase the maximum loan available from £224,500 to £275,000, the bank said.

To qualify, and subject to affordability, customers must apply for a first-time buyer mortgage with Lloyds Bank or its sister brand Halifax, have a total employed household income of £50,000 or more, have a deposit of at least 10% and not be using shared ownership or shared equity schemes.

The bank said it is making £2 billion of lending available to first-time buyers borrowing more than 4.5 times their income.

Andrew Asaam, homes director at Lloyds Banking Group, said: “Getting the keys to a first home is a big deal, but it’s tough right now.

“Aspiring homeowners have been struggling with house prices rising faster than their wages. They need to save for a deposit, keep up with rent, and choose the right mortgage.”

Toby Leek, NAEA (National Association of Estate Agents) Propertymark president, said: “It is encouraging to see banks offering help to first-time buyers at a time when many continue to struggle to take their first step onto the housing ladder, and it will be interesting to see what long-term benefits this scheme may generate.”