A mortgage broker has explained why getting on the property ladder might be easier than many people think. According to Sarah Fox-Clinch, the door to owning a home is now 'open wider than it has been in nearly two decades,' despite widespread doom and gloom.
Outdated Assumptions
Many prospective homebuyers still believe mortgage lenders will only offer loans worth four-and-a-half times their salary. However, Fox-Clinch, director of Bristol-based mortgage broker Fox Davidson, says that assumption is badly out of date. In recent years, lenders have quietly become far more flexible with both income multiples and deposit requirements, opening the door to borrowers who may have previously assumed homeownership was out of reach.
'The four-and-a-half times income rule used to be the ceiling. It is now much closer to the floor,' she said. 'For a lot of buyers who still think getting a mortgage is impossible, the reality is that the door is open, they are just looking at the wrong door.'
Key Lender Changes
One of the biggest recent changes came from NatWest, which raised its maximum loan-to-income ratio to 6.5 times earnings for joint applicants earning £150,000 or more. That means a couple with a combined income of £150,000 could potentially borrow up to £975,000, compared to around £675,000 under the old four-and-a-half-times model.
NatWest is far from alone. April Mortgages now offers up to seven times income for borrowers earning at least £50,000, provided they take a long-term fixed mortgage. Teachers Building Society also offers seven times income for people working in education, while HSBC, Nationwide and Barclays have all increased lending multiples for certain customers.
'Lenders have become much more aggressive in how they assess affordability, particularly for higher earners and borrowers with stable incomes,' Fox-Clinch said. 'The mortgage market today looks very different from what many buyers remember even a few years ago.'
Deposit Requirements Shift
Deposit requirements have also shifted significantly. Lloyds, Halifax and Bank of Scotland recently launched mortgage products allowing first-time buyers to purchase with deposits as low as £5,000 on properties worth up to £300,000. Skipton Building Society has been offering its Track Record mortgage since 2023, allowing renters with a strong history of paying rent on time to potentially borrow the full value of a property without any deposit at all.
Fox-Clinch believes many people who gave up on buying during the difficult mortgage market conditions of 2023 may now be surprised by what is available. 'If someone walked away from a purchase two years ago because the numbers did not work, it is well worth revisiting things now. There are far more options available than many people realise,' she said.
Caution Advised
She also warned that higher borrowing limits and smaller deposits inevitably came with greater financial risk. 'Just because somebody can borrow more does not always mean they should. Higher income multiples create larger debts and very small deposits leave borrowers with less protection if property prices fall.'
Fox-Clinch stressed that affordability should still be approached carefully, particularly given ongoing uncertainty around inflation and interest rates. But despite those risks, she believes the market has become considerably more accessible than public perception suggests. 'The reality is the door to owning a home is open wider than it has been in nearly two decades,' she added.
