First time property buyers - this ones for you!

What Just Changed with Mortgage Rules — and Why It Might Help First-Time Buyers

If you’ve been saving hard, renting for years, and still struggling to get on the property ladder, this might be the first piece of good news in a while.

The Bank of England has just announced a change that could make it easier for some first-time buyers to get a mortgage. It’s not a dramatic overhaul, but it does quietly loosen one of the most limiting rules around how much you’re allowed to borrow and that could make all the difference if you’ve previously been told no.

Until now, banks had a fairly strict cap on how many mortgages they could offer to people borrowing more than 4.5 times their income. That limit has made things particularly hard for first-time buyers, especially in high-cost areas where salaries simply haven’t kept pace with property prices. Even if you had a deposit and could clearly afford the repayments, the system often said you were too risky.

Now, that rule is shifting slightly. The 15 percent cap is still in place across the industry, but individual banks will have more flexibility to approve these higher-income-multiple mortgages. In other words, they’re getting a bit more freedom to say yes, especially to applicants who are otherwise financially stable.

It might not sound like much, but it’s estimated this change could lead to around 36,000 additional higher-income mortgages a year. That’s 36,000 more chances for people to stop renting and start owning.

Lenders like Nationwide have already welcomed the move, saying it could help people who’ve been locked out of the market for years because of rising rents and cost-of-living pressures. It also aligns with the government’s push to grow the economy and encourage new housebuilding.

But it’s not all smooth sailing. The Bank of England has also warned that millions of homeowners are facing higher monthly payments as their current mortgage deals expire. The average increase is around £107 a month — not insignificant, especially with everything else going up.

That said, things are slowly shifting in the right direction. Interest rates have started to come down, and about 2.5 million households will actually see their mortgage costs decrease over the next three years.

So what does this all mean for first-time buyers?

It’s not a magic fix. You’ll still need to show you can afford the loan, and getting a mortgage will always involve some hurdles. But this change signals a softer stance, one that recognises the reality of the housing market today and the challenges younger buyers are facing.

If you’ve been told you don’t earn enough, even though your finances are in order, this update might open a door that was previously closed. It’s still worth speaking to a mortgage adviser and understanding your options, but the message is clear: lenders may finally be ready to listen a little more closely.

And after years of being told to save harder, wait longer, or lower your expectations, that’s a shift worth paying attention to.