Purposeful action succeeds – Mortgage Strategy

Affordability remains a challenge for many would-be homeowners, with house prices still outpacing wage growth in several regions.

However, we recently released new analysis of Land Registry data that will come as great news for aspirational homeowners and the brokers who support them.

Our analysis shows that 51,602 extra properties would have been within reach of first-time buyers (FTBs), based on recent changes in lending assessments.

This is equivalent to 65% more homes, as a result of adjustments to the rules on the proportion of higher loan-to-income lending that providers can advance.

We changed our affordability assessments for FTB mortgages so that single or joint applicants earning £30,000 could borrow up to 95% loan-to-value. This means that FTBs on this salary can borrow up to £165,000, and therefore buy a home worth £173,000.

This should give the housing market the boost it needs

Before these changes, an FTB with a 5% deposit could have accessed homes worth up to £141,000 when borrowing from Leeds.

Using Land Registry data from 1 July 2024 and 31 June 2025, we calculated that the number of homes that would have been affordable to eligible FTBs — had the new lending rules been in place — rose to 143,017, up from 86,915, an increase of 65%.

Hopefully, this will provide some reassurance to our intermediary partners that a £30,000 income is enough to help their clients achieve their homeownership dreams; and encourage brokers to contact prospective buyers who may have believed they weren’t quite ready to take their first step onto the ladder.

Refreshed guidance

The changes that lenders have recently made should give the housing market the boost it needs. Following recent clarification from the Financial Conduct Authority about stress-testing rules, a number of lenders have altered the way they assess a borrower’s affordability.

Previous limits were restricting many lenders’ ability to support both aspiring homeowners and the UK growth agenda. But the refreshed guidance from the FCA clarified how to incorporate future interest rate movements into stress testing.

We hope that lenders will continue to come up with solutions to support more FTBs

It emphasised that banks and building societies have flexibility in choosing a stress rate, linking to reversion rates or future product rates rather than applying a fixed margin above current standard variable rates.

Following this clarification we took action and the changes are already benefiting borrowers buying their first house, moving up the property ladder or remortgaging their existing home, with applicants able to borrow thousands of pounds more than previously.

Stress-testing requirements have unduly held back some borrowers, so it’s good to lend more to customers as a result of these changes in affordability assessments.

Saying yes

Avoiding unnecessarily restrictive affordability tests, particularly in a falling interest rate environment, is also great news for brokers.

It means that intermediaries can say yes to more clients and revisit affordability on cases where applications previously fell short.

All lenders are mindful of balancing more generous affordability with responsible lending. We will continue to update our stress-rate assumptions and affordability models to align with market conditions and regulatory expectations. In collaboration with our intermediary partners, we’ll continue to seek the best outcomes for borrowers.

The adjustments to affordability models offer a more realistic view of what borrowers can afford to repay every month

Putting homeownership within reach of more people is the goal. Over recent years, a toxic combination of historically high house prices, the increasing cost of living, limited housing stock and higher interest rates has made it difficult for borrowers.

To help aspirational homeowners overcome these obstacles, lenders are launching more innovative products.

For intermediaries, such products are having a huge impact on their clients. The adjustments to affordability models offer a more realistic view of what borrowers can afford to repay every month and give FTBs a better chance of getting a foot on the property ladder.

Hopefully, this will provide some reassurance to our intermediary partners

The purposeful action taken now will pave the way for future homeowners. We hope that lenders will continue to come up with solutions to support more FTBs, and further bolster the future of the housing market.

Martese Carton is director of mortgage distribution at Leeds Building Society

This article featured in the December 2025/January 2026 edition of Mortgage Strategy.

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