If you’re trying to buy your first home, it can feel like everything is working against you. Saving a deposit is hard when the cost of living is high, the average UK house price now sits close to £300,000, and mortgage rates have edged upward. The good news is that recent changes to the way lenders assess mortgages could make owning your own home more achievable than it was even a year ago.

What has actually changed?

For years, regulation limited how much banks and building societies could lend relative to income. Technically, only 15% of a lender’s new mortgages could be at more than 4.5 times a borrower’s income, and many of the larger lenders played it safe well below that ceiling. That cap has now been relaxed. As a result, a growing number of lenders are offering loans of six, and in some cases up to seven, times annual income, with niche lenders and building societies sitting at the highest end of the scale.

For a first-time buyer, that shift can be significant. The amount you may be able to borrow could have changed markedly in a relatively short space of time, potentially bringing ownership within reach for people who assumed it was still years away. The Financial Conduct Authority estimates the change to high loan-to-income lending could support up to 36,000 more first-time buyers a year.

Why the rules were so strict

Cautious lending has its roots in the 2008 financial crisis, when reckless mortgage lending was widely blamed for pushing banks to the brink and costing people their homes. In 2014, standards were deliberately tightened. But house prices have risen sharply since then, often outstripping wage growth, so for many buyers a larger loan relative to income has become the only realistic route onto the ladder. Encouragingly, around 99% of mortgages taken out since those 2014 rules came in are not in arrears, a sign that stronger protections have been doing their job.

The FCA’s latest proposals

On top of the relaxed lending limits, the FCA is consulting on a wider set of reforms (its Mortgage Rule Review, CP26/18) designed to help first-time buyers and other underserved borrowers. The proposals would give lenders more flexibility to look at individual circumstances rather than applying blanket rules. They include:

• Reducing barriers for people with variable income, such as the self-employed, and for those paid in a foreign currency.
• Encouraging lenders to assess affordability on your full, current situation, rather than automatically ruling you out for minor or historic credit blips.
• Updating guidance so older homeowners can more easily unlock wealth tied up in their property.
• Giving lenders more flexibility on interest-only and part interest-only mortgages, while keeping clear repayment plans in place.

The consultation ran until 28 July 2026, so some of these changes are still being finalised, but the overall direction of travel is clear: widening access while keeping sensible safeguards in place.

What you’ll still need

Bigger loans don’t mean the door is open to everyone. To qualify for a larger mortgage as a first-time buyer, you’ll typically still need:

• A good credit history, with limited debt and no missed payments.
• A regular, stable salary, which can make things harder for some self-employed applicants.
• An income high enough to meet a specific lender’s criteria, which varies from lender to lender.
• A willingness to fix your rate for longer, often five or ten years rather than two.
• A deposit, though low-deposit options have been growing too.

Weigh up the risks

Stretching to six or seven times your income isn’t right for everyone. It can be tempting because it offers a way out of renting or living with family, but a larger loan means larger repayments and less breathing room if circumstances change, whether that’s a job loss, illness, or time out to care for a loved one. Lenders can also become more cautious when you come to remortgage in five years’ time if the economic outlook has shifted. As a rule of thumb, it’s wise to have a cash buffer, or a plan, in case something unexpected happens.

How Grange Mortgages can help

This is exactly where choice and advice pays off. Because we’re not tied to any single lender, we can compare the full range of products, including the higher loan-to-income deals and low-deposit options, and match them to your circumstances, not the other way around. We’ll help you understand realistically what you can borrow, what it will cost over the term you choose, and whether stretching further is the right move for you.

If you’re thinking about buying your first home, get in touch with Grange Mortgages today for a friendly, no-obligation chat about your options.

Your home may be repossessed if you do not keep up repayments on your mortgage. This article is for general information only and does not constitute financial advice.