New data shows UK first-time buyers are increasingly opting for high-multiple mortgages to enter the property market. These larger loans help individuals manage rising property costs despite stagnant wages across the country.

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The 66 percent surge in 4.5x LTI borrowing

Recent figures released by the Financial Conduct Authority, as reported by the budget-tracking app Plum, reveal a massive shift in how new homeowners are financing their properties. The number of first-time buyers securing mortgages with a loan-to-income (LTI) ratio of 4.5 times their salary or more climbed from 27,500 in 2024 to 45,800 over the past year, representing a 66 percent increase.

The escalation in risk is even more pronounced at higher multiples. According to the report, the count of mortgages where the LTI reached 5.5 times or higher grew from just 420 in 2024 to 4,628 by the close of the most recent year—a nearly tenfold increase. This trend hiighlights a growing reliance on debt to overcome the gap between earnings and property valuations.

Lenders offering up to seven times annual salary

To meet this demand, several UK lenders have expanded their borrowing limits, offering multiples that far exceed traditional caps. April Mortgages, for instance, allows borrowers to take out loans up to seven times their salary, provided they earn at least £50,000 and provide a 15 percent deposit. Coventry Building Society has also moved to a 6.5 times LTI limit for eligible applicants, though they require a minimum income of £30,000 for single borrowers and £50,000 for couples.

Other institutions are utilizing different requirements to manage this increased exposure:

  • Nationwide offers a "Helping Hand" mortgage with a 6x LTI and a 5 percent deposit.
  • Tipton Building Society caps its higher LTI offers at 6.5 times income but mandates a 20 percent deposit.
  • NatWest restricts its 6.5x LTI products to high earners with incomes of £150,000 or more and a 25 percent deposit.
  • HSBC provides similar 6.5x LTI options for Premier account holders earning at least £100,000.

    • A 16 percent rise in total first-time buyer loans

    This surge in high-multiple borrowing is part of a broader increase in overall market activity. The total number of first-time buyer loans in the UK jumped to 380,716 last year, up from 327,001 the previous year, marking a 16 percent increase. This growth comes as a pragmatic response to the economic reality of rapidly rising house prices paired with stagnant wage growth.

    The current landscape echoes the volatility seen following the 2008 global financial crisis, though the modern approach involves relaxing the strict 15 percent cap that previously limited how many high-LTI loans a lender could hold on its books.. Instead , the market is seeing a widespread expansion of credit options to facilitate entry into homeownership.

    Will the Prudential Regulation Authority's July 2025 review curb this trend?

    As lending practices evolve, significant questions remain regarding the long-term stability of the housing market.. While the Prudential Regulation Authority signaled an ongoing review of LTI restrictions in July 2025, it is still unknown how much tighter or looser these regulations will become in response to potential default rates.

    Furthermore, the source does not clarify how lenders will react if interest rates rise sharply, which could disproportionately impact those holding 6x or 7x income loans. There is also the question of whether the Financial Conduct Authority will implement new safeguards to ensure that the "solid income" and "good credit history" they require are sufficient to withstand future economic shifts.