Leeds Building Society has expanded its Income Plus mortgage range, extending higher income multiples to support homeowners looking to take their next step up the property ladder in the wake of a growing gap between first-time buyer and second-stepper homes.
The mutual has enhanced its affordability assessments to allow borrowing of up to six times loan to income for qualifying applicants, targeting so‑called "next steppers" who are increasingly constrained by affordability limits linked to household income.
The changes come as the Society releases new research indicating that Brits are putting off key life moments as they admit feeling stuck in starter homes.
The data shows that almost three-quarters (70%) of recent first-time buyers say their current living situation has impacted their plans to have more children, and two-thirds (65%) feel like moving up the property ladder is currently out of reach for them.
Many are thinking ahead to their next step, with almost two-thirds (62%) of recent buyers feeling they have, or will have, outgrown their home within the first three years of homeownership.
But recent market data from Rightmove revealed that the price gap between a typical first-time buyer property and a second-stepper home is 52%, highlighting the challenges facing homeowners and their brokers.
Leeds Building Society launched its Income Plus range of mortgages at the end of 2024, offering higher income multiples alongside a lower minimum income threshold. Under the latest enhancements, “next steppers” with a single or joint income of £75,000+ can borrow up to six times their income, and applicants with an income of £50,000+ can borrow up to five and a half times their income when moving up the ladder.
Among recent buyers planning to move up the property ladder, the most common drivers are practical rather than aspirational, though many feel they have been held back by affordability limitations. 60% of recent buyers cited the need for more bedrooms, almost half (49%) said the desire for more space, 46% said the need for more storage was a motivator, and 45% cited planning for children in the future as a driving factor.
Martese Carton, director of mortgage distribution at Leeds Building Society, said: "We’ve supported members into homeownership for over 150 years, but our research shows that a significant number of recent first-time buyers expect to outgrow their homes far sooner than anticipated.
"The increasing price gap between first and second properties presents a real affordability challenge. Many households need just one additional bedroom, yet the step up in price can be substantial and difficult to bridge under standard income multiples.
"By expanding our Income Plus range, we’re aiming to give next steppers greater borrowing flexibility where it’s affordable to do so, supporting more sustainable home moves and helping keep the housing market flowing."
David Hollingworth, associate director at L&C Mortgages, said: "Rightly, there’s been a strong focus on first-time buyers having access to more flexible criteria, but there can also be a big step up for next-time buyers, as they look to upsize to a property that will meet their future needs.
"Growing families want to avoid the cost and stress of multiple, stepping-stone house moves, and so will want lenders to have the latitude to apply a measured, more accommodating approach to income multiples, where affordability can be met.
"That will help more next steppers to expand their property search, as they look for a place that they can make their forever home."
