UK’s largest lender unveils first-time buyer boost

The Government may be silent so far on support schemes for first-time buyers but the UK’s largest lender now appears to be offering a helping hand.

Lloyds Banking Group yesterday said it was making £2bn lending available to first-time buyers borrowing more than 4.5x income.

This could beneficial amid high house prices and ahead of the end of March 2025 when the first-time buyer Stamp Duty exemption is dropping from £425,00 to £300,000.

Lloyds and Halifax are now offering a First-Time Buyer Boost that lets applicants borrow up to 5.5 times their household annual income, up from 4.49x.

There are some caveats though.

To qualify for the First-time Buyer Boost, and subject to affordability, customers must a total employed income of £50,000 or more.

It can be used for a loan-to-value of up to 90% but not for Shared Ownership or Shared Equity schemes.

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. Becoming a homeowner is one of the most fundamental things you can do to secure your long-term financial future, but it's not easy. First-time Buyer Boost aims to make this journey easier by helping people make their income go even further.”

Commenting on the change, Toby Leek, NAEA 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.  

"We now need to see more homes being built in order to keep up with rising demand as this will bring down prices in the long-term and make homeownership more affordable for all."