Nationwide is making it easier for more people to get on the property ladder by relaxing the income criteria for its Helping Hand mortgage boost – which offers lending of up to six times’ income.
It follows the Prudential Regulation Authority’s (PRA) recent announcement enabling lenders to increase high loan-to-income (LTI) lending1.
From Wednesday (16 July), eligible first-time buyers can apply for the mortgage with a £30,000 salary, down from £35,000, and joint applicants with a £50,000 combined salary – down from £55,000. This is expected to support an additional 10,000 first-time buyers each year.
Nationwide, which lent to more first-time buyers in 2024 than any other lender, has confirmed it has now applied to the PRA to increase its high LTI lending capacity.
The vast majority of Nationwide’s high LTI lending is done through its Helping Hand, which allows eligible first-time buyers to borrow up to six times income – allowing borrowing up to 33% more than standard lending. Helping Hand has helped around 60,000 first-time buyers since launching in 2021.
Prior to the PRA announcement last week - recommended by the Financial Policy Committee - lenders could only offer a limited amount of loans at or above 4.5 times a borrower’s income - capped at 15% of their eligible new loans.
Nationwide’s current salary thresholds were put in place to ensure that it kept within the 15% limit following exceptionally strong demand for the proposition. Arrears rates on Helping Hand are lower than those of Nationwide’s standard lending due to the enhanced controls being applied.
Nationwide hopes the relaxing of criteria helps contribute towards economic growth by introducing more first-time buyers into the housing market and stimulating more housebuilding. It comes after the UK’s biggest building society increased the maximum loan-to-value on new build houses to 95%.
Henry Jordan, Nationwide’s Director of Home 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.”
First-time buyers receive £500 cashback when they complete their mortgage with Nationwide and can also benefit from an additional cashback of up to £500 if they purchase an energy-efficient property through Nationwide’s Green Reward.
