New Mortgage Product Could Unlock More Homes For First Time Buyers

Big news for first time buyers, as Lloyds Banking Group announces plans to offer £2 billion in loans to first-time buyers who need to borrow more than 4.5 times their income.

This positive boost is much needed, as The Building Societies Association (BSA) reported that first-time buyers are facing the toughest conditions in 70 years, with rising rents and inflation slowing down their progress towards saving for a deposit and getting that first step on the housing ladder. That, coupled with higher interest rates and house prices, have led to a decline in the amount of young people owning a home in the last 20 years.

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 incomes. They need to save for a deposit and keep up with rent. 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.”

Emily McKenzie, Head of Sales at Strata, added: “We’re seeing so many first time buyers come through the door, desperate to buy their dream first home, but more and more are struggling with their affordability. While Strata are offering deposit contributions and doing whatever we can to make it work, the lowering of the Base Rate coupled with the Lloyds [Banking Group] First-time Buyer Boost will certainly open the door to so many who have previously not been able to take that first step on the ladder due to affordability. We’re excited to see what the rest of the mortgage market has to offer in response!”