A rule change by the UK’s Financial Conduct Authority (FCA) and the Prudential Regulation Authority (PRA) has more than doubled the number of first-time buyers taking out mortgages at the highest loan-to-income (LTI) multiples, according to data obtained from the regulator by mortgage network Stonebridge.
In the year to the end of June 2026, the number of first-time-buyer loans at 5.5 times income or more rose 142.2% to 7,621. Loans between 4.5 and 5.5 times income rose 36.1% to 48,839, taking combined first-time-buyer lending at 4.5 times income or above up 44.7% year-on-year, to 56,460. Total first-time-buyer mortgage sales edged up 3.1% to 375,657 over the same period, while non-first-time-buyer sales rose 15.5% to 896,415 — and non-first-time-buyers borrowing above 4.5 times income also climbed sharply.
The change stems from a cap that had limited each lender to issuing no more than 15% of its mortgages at above 4.5 times income — the loan-to-income “flow limit.” The PRA and FCA invited lenders in July 2025 to apply for permission to exceed that limit; the resulting rule change became permanent this month.
Trade body UK Finance has previously said lending between 4.5 and five times income “is no riskier than lower-LTI lending,” arguing the higher threshold frees up first-time-buyer lending “without materially increasing default risk.” A Stonebridge spokesperson said the change gives “stretched first-time buyers” a better chance of buying the property they want, sooner.
The rule applies across UK mortgage lenders generally and is separate from the “Your First Home” scheme announced days earlier, which sets regional price caps for a government-backed buyer programme rather than changing how much lenders can let any borrower take on relative to income.
References
Estate Agent Today – Thousands More First Time Buyers Likely After Mortgage Reform
