The number of first-time buyers borrowing at least 5.5 times income has more than doubled in the year since regulators amended lending rules, FCA data obtained under a Freedom of Information Act request by Stonebridge reveals.
The number of first-time buyer home loans in the top LTI bracket increased by 142.2% to 7,621 in the year to the end of June — the first full year since lenders could issue more high-LTI mortgages.
Analysing the LTI bands in more detail, the figures reveal that first-time buyer lending between 4.5 times and 5.5 times income has risen 36.1% to 48,839 in the 12 months since the rule change, while combined high-LTI lending to first-time buyers of at least 4.5 times income climbed 44.7% year-on-year to 56,460.
The PRA and FCA invited lenders to apply for permission to exceed the LTI flow limit in July last year under proposed rule changes that became permanent this month. The LTI flow limit had been used to cap the number of loans that individual lenders could make at over 4.5 times income to 15%.
The figures also reveal that other borrowers are taking advantage of the new regime.
The number of non-first-time buyer mortgages at LTI ratios over 4.5 rose 56.6% annually to 58,835. Those between 4.5 and 5.5 times jumped 64.3% to 49,936, while those above 5.5 increased 24.1% to 8,899.
Total first-time buyer mortgage sales in the year to the end of June 2026 nudged up 3.1% to 375,657, while non-first-time buyer mortgage sales were up 15.5% to 896,415.
UK Finance has previously stated that “lending between 4.5 and five times income is no riskier than lower-LTI lending. Raising the threshold could free up significant first-time buyer lending without materially increasing default risk or fuelling the credit cycle”.
Rob Clifford, chief executive at Stonebridge, said: “More accommodating loan-to-income rules are proving to be game changing for large numbers of borrowers, particularly aspiring homeowners.
“High LTIs don’t necessarily increase risk to lenders or borrowers, so these changes last year were roundly welcomed. They create more options for borrowers, wider freedom for lenders and a more fluid mortgage market that better serves everyone concerned.
“Borrowers have a greater chance of actually buying the property they really want, and stretched first-time buyers can get on the property ladder sooner or in areas they could only dream of living.
“Advisers need to keep in mind that the flow limit still applies across the industry as a whole, but the availability of high-LTI loans, or lack of them, is no longer quite so black and white.
“However, they’re not a silver bullet. Higher borrowing won’t be right for everyone and, where one is being considered, borrowers’ financial circumstances need to be studied in detail. The number of borrowers, the size of their deposit, their employment circumstances and arrangements to protect their ability to stay in the home should they become too ill to work all have to be carefully weighed.”
