Lloyds Banking Group (LLOY.L) will make an extra £4 billion available to first-time buyers borrowing at high loans-to-incomes, following recent mortgage lending reforms.

The banking group is expanding its first-time buyer boost scheme, which is available through Lloyds Bank and Halifax.

Since launching the initiative in August 2024, 11,000 first-time buyers have already been helped to get on the ladder by borrowing more than 4.5 times their income, the bank said.

To qualify for the first-time buyer boost, and subject to affordability, customers must have a total employed household income of £50,000 and a deposit of at least 10%, among other criteria.

Based on typical borrowing trends, around an extra 13,500 more first-time buyers could potentially be helped by Lloyds’ extra cash injection.

Many banks have recently updated their affordability assessments, following clarification from the Financial Conduct Authority (FCA).

Lloyds said that in the the two months since updating its affordability assessments, it has helped more than 1,000 first-time buyers access a mortgage that they would not have qualified for before.

Andrew Asaam, homes director at Lloyds Banking Group, said: “Recent affordability changes have already started to help would-be homeowners get on the property ladder sooner and lending an extra £4 billion means we can help even more customers get the keys to their first home.”

More mortgages in general are set to be available at more than 4.5 times a buyer’s income following recent Bank of England recommendations that some lenders can offer more high loan-to-income mortgages if they choose to.

Britain’s biggest building society – Nationwide (NBS.L) – announced last week that it is aiming to increase its high loan-to-income lending limit.An extra 13,500 more first-time buyers could potentially be helped by Lloyds’ extra cash injection (Yui Mok/PA)

Eligible first-time buyers can now apply for Nationwide’s Helping Hand mortgage with a £30,000 salary, down from £35,000, and joint applicants with a £50,000 combined salary – down from £55,000.

The Government has been looking to cut red tape around financial services as part of its drive for economic growth.

Meanwhile, Barclays (BARC.L) announced cuts on rates across 32 mortgage products on Thursday, coming into effect from Friday.

They include a two-year fixed rate for borrowers with a 40% deposit at 3.76%, down from 3.89% previously. The loan has an £899 product fee.

A two-year fix with no product fee will see its rate cut from 4.09% to 4.03%. The deal is available to borrowers with a 40% deposit.

For people with a 25% deposit, Barclays is offering a two-year fix from Friday at 3.93% with an £899 product fee and a two-year fix at 4.15% with no product fee.

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