Coventry Building Society has increased borrowing limits for first-time buyers – potentially cutting the required deposit from £69,173 to £12,273.
The lender has introduced borrowing of up to 6.5x income for eligible first-time buyers, available for a minimum income of £30,000 for sole applicants and £50,000 for joint applicants.
A sole applicant earning the average UK salary could potentially borrow up to £255,190 under the new criteria, enough to purchase an average-priced first-time buyer home in England (£245,450) with a 5% deposit of £12,273.
Previously, the same borrower could have borrowed around £176,277, meaning they would have needed a deposit of £69,173 – over 28% of the property value.
The difference of £56,900 would take someone saving £400 per month approximately 11 years and 11 months to save. Someone saving £300 per month would need 15 years 10 months.
Alongside these changes, Coventry Building Society has also enhanced support for those buying a new build property – with lending now available on up to 95% LTV on new build houses and 85% LTV on new build flats.
Matthew Carter, head of homes at Coventry Building Society, said: "Too many first-time buyers have done all the right things only to find homeownership still out of reach - and it's often even more challenging for people buying alone. As house prices have risen, the gap between what a single income can borrow and the cost of a typical first home has become increasingly difficult to bridge.
“When borrowing power falls short, many aspiring homeowners are forced to put their plans on hold or rely on support from family. But homeownership shouldn’t depend on having access to the Bank of Mum and Dad, and it shouldn’t feel especially out of reach for those buying on their own.
“By increasing borrowing potential for eligible customers, we're helping more people buy a home based on the strength of their own income. It could mean buyers will be in a position to purchase much sooner – turning homeownership from a distant aspiration into a more achievable goal.”
