Following the Prudential Regulation Authority (PRA) announcement allowing lenders to apply to lend more mortgages at high loan-to-income (LTI) ratios, Nationwide has lowered the minimum income required for the Helping Hand proposition.
It will accept applications from first-time buyers with a £30,000 salary, down from £35,000 previously, while joint applicants must have a combined income of £25,000, previously £55,000.
The mutual said this change should support an additional 10,000 first-time buyers each year.
It confirmed that it also applied to the PRA to increase its high-LTI lending capacity. Last week, the regulator said lenders could apply for the ability to issue more than 15% of their residential mortgage lending at high-LTI ratios.
Most of Nationwide’s high-LTI lending is completed through its Helping Hand proposition, and since launching in 2021, it has helped around 60,000 first-time buyers.
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Further, the mutual claims that last year, it provided mortgages to more first-time buyers than any other lender.
Nationwide said the current salary thresholds help it stay within the 15% limit, noting that arrears rates on Helping Hand mortgages were lower than other accounts due to this safeguard.
Henry Jordan, director of home at Nationwide, said: “The PRA’s announcement unlocks lending for first-time buyers at what remains a difficult time for homeownership. It has given us the confidence to respond quickly by relaxing our lending criteria on Helping Hand. Our changes mean more people, particularly those on lower incomes, could become eligible for a mortgage.
“We also hope our commitment to further lending provides a boost to the UK’s housebuilding ambitions, as well as encouraging other lenders to increase support for those looking for a home of their own.”
