Extra help for first-time home buyers is on the way as Lloyds Banking Group increases the amount prospective homeowners can borrow, via a new product called First-time Buyer Boost.

Through Lloyds Bank and Halifax, the UK’s largest lender is making £2 billion available to first-time buyers (FTBs) borrowing more than 4.5 times their income to help people get on the housing ladder. In 2023 alone, the bank lent £12 billion to first-time buyers.

According to some estimates, over half of FTBs (54%) now need a loan of more than 4.5 times income, rising to 80% in London.

First-time Buyer Boost introduces an improved loan to income (LTI) multiple for all eligible FTBs from 29th August 2024. This allows them to borrow up to 5.5 times their household annual income, up from 4.49 times.

Based on a household income of £50,000 and a deposit of 10% this will increase the maximum loan available from c£224,500 to c£275,000 (a 22% increase).

To qualify for the First-time Buyer Boost, and subject to affordability, customers must:

– Apply for a first-time buyer mortgage with Halifax / Lloyds Bank;
•    Have a total employed household income of £50,000 or more;

•    Have a loan to value (LTV) of up to 90%;
•    Not be using Shared Ownership or Shared Equity .

The offer is available across all channels: phone, online, branch and through intermediaries. There are no processing changes or additional steps for mortgage brokers and mortgage advisers to deal with, applications can progress as usual.

Andrew Asaam, Homes Director at Lloyds Banking Group, says: “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.”