Mortgage rules could be eased for first-time buyers

Plans to ease mortgage rules could help first-time buyers enter the housing market by allowing lenders more flexibility in assessing "responsible risk-taking" by borrowers. Financial regulators are reviewing measures such as relaxing stress-testing rules and removing limits on lending, which currently cap 15% of mortgages at 4.5 times a borrower’s annual salary. Banks are also calling on the Bank of England to reduce the amount of capital they need to keep in reserve for 90% loan-to-value mortgages, to open up the market to first-time buyers. The move aligns with Rachel Reeves' efforts to promote a "pro-growth agenda" following a Treasury meeting with regulatory agencies, where the chancellor urged a shift towards fostering economic growth rather than focusing excessively on risk. Charles Roe, director of mortgages at UK Finance, said a review of mortgage lending rules would be welcome, noting that the number of homeowners in arrears on their mortgages was at "historically low levels". 

The Times