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Regulators Let Lenders Exceed Mortgage LTI Caps to Aid First-Time Buyers

From July 11 only mortgage providers with annual lending above £150 million will be bound by the high-LTI cap, a move regulators say could unlock up to 36,000 extra high-ratio loans for first-time buyers.

People walk near the Bank of England building in London, Britain, June 24, 2025. REUTERS/Carlos Jasso/File Photo
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Overview

  • The Bank of England’s Financial Policy Committee has approved rules allowing individual lenders to breach the 15% high loan-to-income flow cap so long as the sector-wide limit holds.
  • The Financial Conduct Authority and Prudential Regulation Authority will raise the annual lending threshold from £100 million to £150 million, exempting smaller firms from the cap.
  • Regulators say the flexibility aims to help first-time buyers access larger loans despite deposit requirements remaining the main barrier.
  • Nationwide Building Society estimates the change could enable it to lend to an additional 10,000 first-time buyers each year.
  • The Bank of England projects that the unused capacity under the cap could translate into up to 36,000 more high-LTI mortgages annually before its end-2025 capital requirements review.