Lloyds Banking Group is widening access to higher loan-to-income borrowing for new buyers by reducing the minimum household income required for First-Time Buyer Boost.

From five December, households earning £40,000 will be eligible to borrow up to five point five times their income with Lloyds or Halifax — down from the previous £50,000 threshold.

INCREASED CAPACITY FOR FIRST-TIME BUYERS

The Group said the change will release a further £1bn of mortgage lending, building on the £8bn already pledged since the scheme’s launch in August last year. More than 15,000 first-time buyers have so far benefited from higher loan-to-income underwriting.

The reduction in minimum income follows affordability changes in April, which the group said increased the average amount a family could borrow by around £38,000. With the latest revision, customers earning £40,000 with a 10% deposit can now borrow £220,000, up from £179,600 — a rise of 22%.

Andrew Asaam, homes director at Lloyds Banking Group, said: “Today’s £1bn commitment takes us to a total of £9bn specifically to help people get on the ladder quicker.

“We understand the difference this can make to first-time buyers, having lent more money to more aspiring homeowners than any other bank so far this year, and we’re really pleased to be able to offer what they need in a responsible and sustainable way.

“We are making better lending decisions for those who can genuinely afford to borrow more.”

SELF-EMPLOYED BUYERS BROUGHT INTO SCOPE

The Group is also extending First-Time Buyer Boost to self-employed borrowers for the first time. Loan-to-income limits for self-employed applicants will be aligned with those available to employed borrowers, allowing those with smaller deposits to borrow up to five point five times their income.

The changes apply from five December and will be available through both Lloyds Bank and Halifax, which together remain the UK’s largest lenders to first-time buyers.