Barclays Mortgages has reduced the threshold at which the 5.00 x income multiple cap applies to £175,000 from £200,000 previously for mortgage applicants.
The changes are effective from today, Friday 21st August 2015.
Just over a year ago, in July 2014, Governor of the Bank of England Mark Carney announced two new mortgage lending rules to calm the runaway housing market.
Firstly, borrowers stretching themselves to a loan-to-income ratios of over 4.5% would be capped to under 15% of annual lending. Secondly, these deals had to undergo affordability tests to check borrowers could stand a 3% rate rise on deals.
Since then, several lenders have gradually loosened their lending restrictions after the initial rush to comply, including Barclays, which has already reduced its 5 x income tier to applicants for loans above £300,000 in March, then again to £200,000 in June.
Craig Calder, director of mortgage products at Barclays, said: “We’re making these changes because we want to extend the opportunity for more people to become homeowners. We understand that first-time buyers in particular have a unique set of challenges and know that this will widen opportunities for them to get onto the property ladder – as we continue to lend in a responsible way.”
All other income multiple limits are unchanged.
Victoria Hartley is contributing editor at Mortgage Solutions, Specialist Lending Solutions, Your Money and Your Mortgage at London-based publishing company AE3 Media.
She has an MA in Radio from Goldsmiths after gaining a 2:1 in a Comparative American Studies BA at Warwick University. She also holds a TEFL qualification and taught overseas in Mexico and Japan from 1994 to 1997.
Her role includes editorial oversight of the news, analysis and features, event content management and strategic and editorial consultancy for the AE3 Media group. She is an experienced video, broadcast and live-event host and regularly chairs web and podcast debates and interviews.
Multiple award nominations have resulted in two wins: Santander Media Awards, trade journalist of the year and Headlinemoney Awards, mortgage journalist of the year (B2B). Here is one of the award-winning pieces: https://www.mortgagesolutions.co.uk/news/2011/07/21/exclusive-tale-bailey-fraud-witness/
Previous roles include editorships of Mortgage Solutions, consumer title What Mortgage and trade title Credit Today as well as a stint freelancing for a variety of outlets including The Guardian and Which? Money.
