Giving first-time buyers a boost

Giving first-time buyersa boost

We're launching new support to get more first-time buyers onto the property ladder.

What's the reality for first-time buyers?

The housing market is looking pretty daunting to first-time buyers right now. A recent report found that the current climate of historically high house prices relative to incomes, elevated interest rates and affordability challenges have resulted in the most difficult conditions for first-time buyers in 70 years¹.

In fact, since 2000 house prices have increased by 240%, while earnings have risen by just 112%². This has caused some significant challenges when it comes to the loan to income ratio of prospective buyers who need a mortgage to buy a home, which currently sits at around 7 times the average income.

An average first-time buyer household income in 2024 is £73,000³, and it's estimated that 54% of prospective first-time buyers need a mortgage at or above 4.5 times their income (rising to almost 80% in London)⁴.

So, based on the average first-time buyer household income of £73,000, the current maximum amount that a customer could borrow, based on 4.5 times what they earn, is around £361,000.

What's Lloyds Banking Group doing to help support more first-time buyers onto the property market?

Becoming a homeowner is one of the most fundamental things someone can do to secure their long-term financial future, but it's not easy. To help make homeownership more attainable, we have a number of products and propositions across our brands to help give aspiring homeowners a step-up onto the property ladder, and in 2023 we lent £12 billion to first-time buyers.

Some of the first-time buyer solutions we offer include:

First-time Buyer Boost

From 29 August, we're launching an exciting new proposition called First-time Buyer Boost. This enhances the loan to income multiple to 5.5 times for eligible first-time buyers who take out a mortgage with Halifax or Lloyds Bank with a loan-to-value of 90% or less⁵. Currently, the maximum amount we lend to these customers is 4.49 times their income. First-time Buyer Boost will enable us to lend eligible customers up to 22% more.

Mortgages with a 5% deposit

We're proud to continue to support the UK Government's Mortgage Guarantee Scheme, which means that first-time buyers can apply for a mortgage of up to 95% of the property's value. This makes it easier for first-time buyers to save for the deposit they need to purchase their first property, sooner.

Cashback for first-time buyers

The cost of buying a first home can really stack up, so to help out we have a number of cashback offers for first-time buyers under our Halifax brand. In April, we launched an initiative that gives first-time buyers up to £1000 cashback. There's also a Halifax first-time buyer £200 Cashback Primary Current Account Switcher offer. Running from 1June to 30 September, first-time buyers can get £200 cashback for choosing to switch their primary current account to us.

Family Boost Mortgage

Our Family Boost mortgage allows the family members of first-time buyers to put 10% of the agreed property purchase price into a three-year fixed term savings account as security, instead of a deposit. The property still belongs to the buyer in the usual way, and family members get their savings back, plus interest, as long as payments are kept up to date.

Free first-time buyers events

We host free, online educational events with our first-time buyer experts to help prospective buyers understand everything they need to know about buying their first home. Attendees don't need to be Halifax customers, or even at the house hunting stage, to join.

"Since 2000 house prices have increased by 240%, while earnings have risen by just 112%."

What more needs to be done to help support first-time buyers?

While there has been real focus on how we can help people take their first steps on the ladder, there remains real opportunity for industry and government to continue to work together to provide even more support for first-time buyers, with Lloyds Banking Group committed to playing its part.

We are looking at the breadth of ways that first time buyers can choose to get onto the ladder. Whether this is taking out a mortgage with a friend or sibling rather than a romantic partner or spouse, or accessing schemes such as Shared Ownership. On the latter, while these products have been around since the 80s, they remain a relatively untapped resource for first time buyers for whom the ability to own a portion of a property that they can gradually increase over time until they own outright could be both an appealing and appropriate one.

We have also been reflecting on the potential of using rental payments to help assess mortgage affordability. This could mean that renters who have a long track record of paying rent on time would see this considered positively, while we would continue to protect our customers by only permitting them to borrow amounts that they could afford and which would remain manageable if rates were to change in the future.

• External links expandable section

  1. BSA First-time Buyers Report (BSA.org.uk)
  2. First-time buyers face toughest test for 70 years (BBC.co.uk)
  3. Internal Lloyds Banking Group Data
  4. Intermediary Mortgage Lenders Association (IMLA) (mortgagesolutions.co.uk)
  5. Subject to affordability calculator

Related content