New front in lenders’ battle for first-time buyers

While the standard level of borrowing for first-time buyers is a loan of up to 4.5 times’ income, the Nationwide has allowed some to borrow 5.5 times – a move followed by some other major providers.

Now, it will step that level up to six times – but only among first-time buyers with an individual income of at least £30,000 a year, or a couple earning at least £50,000 a year.

It is also planning to reduce some mortgage interest rates slightly, and increase the maximum total loan available.

“It is a welcome move for the right borrowers, but it is not going to work for everyone,” said David Hollingworth, from broker L&C.

The move follows a report by the Building Societies Association, of which Nationwide is a member, which suggested first-time buyers were facing the toughest conditions in 70 years to buy a home.

It called for fresh thinking from the market, including easing some of the limits on lending when borrowers could only offer a relatively small deposit.