First-time buyers can now apply for a mortgage with a salary as low as £30,000, thanks to changes from Nationwide (NBS.L) and new measures supported by the government and the Bank of England (BoE).
The move comes as chancellor Rachel Reeves unveiled what she called the “biggest set of reforms to financial regulation in a decade” at a finance summit in Leeds on Tuesday. These reforms aim to boost economic growth and help more people onto the property ladder.
Under the updated plans, banks and building societies will be able to offer more mortgages that are over 4.5 times a buyer’s income. It’s estimated this could create around 36,000 extra mortgages for first-time buyers within the first year.
As part of this, Nationwide’s “Helping Hand” mortgage will become more accessible. From Wednesday, first-time buyers earning £30,000, instead of the previous £35,000 threshold, will be eligible. Couples will also see the combined income requirement drop from £55,000 to £50,000. This change is expected to help an additional 10,000 first-time buyers every year.
Nicholas Mendes from broker John Charcol said that lowering income thresholds would give real help to people who previously struggled to meet strict affordability rules. For many, this could mean moving from renting to owning their own home.
This change also recognises financial discipline beyond just salary, which Mendes described as a welcome shift.
The reforms will be backed by the creation of a permanent mortgage guarantee scheme, keeping high loan-to-value mortgages available. There will also be a review of Financial Conduct Authority (FCA) rules, which could allow a history of paying rent on time to prove someone can manage mortgage repayments.
Reeves welcomed the Financial Policy Committee’s recent changes to mortgage lending rules, which are being implemented immediately by the Prudential Regulation Authority (PRA) and the FCA. She noted that this would have an “instant impact” for consumers, citing Nationwide’s plans to extend their Helping Hand mortgage as an example.
Henry Jordan, Nationwide’s director of home, said the update means more people on lower incomes could now become eligible for a mortgage. He added that this move might also encourage other lenders to support buyers and help meet the UK’s housebuilding goals.
Beyond helping first-time buyers, Reeves also outlined wider changes under what she called the “Leeds reforms”, aimed at boosting the competitiveness of the UK financial sector. She said these reforms would help more businesses access capital, scale up, and list in the UK.
According to the Treasury, these measures should make the UK the leading destination for finance firms over the next decade. The expectation is that inward investment will help create skilled jobs around the country.
Speaking in Leeds, Reeves detailed the reforms: freeing up firms to take more risks, giving certainty to UK banks so they can compete internationally, and making the UK an attractive base for fintechs. She also highlighted plans to build on the UK’s strengths in areas like asset management, sustainable finance and insurance.
Finally, Reeves pointed to efforts to strengthen capital markets and boost retail investment as part of a broader plan to increase prosperity.
These announcements came ahead of the chancellor’s Mansion House speech, where she is expected to set out how these reforms fit into the government’s wider economic growth strategy.
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