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Halifax policy changes: "This is quite simply a masterstroke by the Halifax"

ended 29. August 2024

Halifax has this morning announced what it refers to as a Home Ownership Boost for first time buyers. It says: "We are pleased to announce we have made £2 billion available for first time buyers (FTBs) who need to borrow at least 4.5x their annual household income through our new proposition First Time Buyer Boost. 

  • New loan to income (LTI) limit of 5.5x to boost maximum loan value
  • Up to 22% additional lending

“We know that one of the main obstacles for FTBs is being able to borrow the amount needed to buy their home, First Time Buyer Boost will enable many FTBs to borrow more meaning we can help more people into homeownership.”

The Halifax added that: "For new purchase applications from Thursday 29 August the maximum LTI is being increased to 5.5x for many FTBs where:

  • Total employed household income is £50,000 or more 
  • Loan to value is 90% or less
  • Not using Shared Ownership or Shared Equity schemes.

Based on an employed household income of £50,000, this will increase the maximum loan available from approximately £224,500 to around £275,000."

Newspage asked brokers for their views, below.

12 responses from the Newspage community

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Simon Bridgland
Director at Charwin Private Clients
This is quite simply a master stroke by the Halifax. It should help boost the coffers for the year with an influx of cherry picked first-time buyers. The First Time Buyer Boost’s increase in loan-to-income will be welcomed by many. However, applicants will need a chunky 10% deposit and to not be using any government-backed schemes. Even then it really will make a lot of difference to many. With the average house price now standing at £266,344 in July according to Nationwide, this will fit nicely with Halifax’s claim of increasing maximum loan amounts from £224,500 to £275,000.
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Ross Lacey
Director & Independent Financial Adviser at Fairview Financial Management
We specialise in working with first-time buyers and this is fantastic news! It will really make a difference to those who have the income to support the higher borrowing amounts.

At the moment, Nationwide are another mainstream lender who are able to help first-time buyers with their Helping Hand mortgages, but this means having to fix for 5 years plus.

In our experience, many first-time buyers prefer a 2 year fix given the flexibility to get out of the deal should things not work out in the their new property. This could be because they decide the property isn’t for them, or, it could be the first time a couple are living together and things don’t work out and they end up going their separate ways!
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Riz Malik
Independent Financial Adviser at R3 Wealth
Halifax is leading the charge in getting first-time buyers onto the property ladder. The recent rate cuts and being more flexible on lending criteria, create the perfect environment to kick-start the UK's housing market. For those first-time buyers who have been left out in the cold, now could be the time to get onto the property ladder, which benefits the whole housing market. If the bottom of the market is moving, that feeds right up the chain.
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Adam Stiles
Managing Director at Helix Financial Partners
This is a hugely encouraging and welcome improvement from Halifax. Home ownership remains far out of reach for so many where house prices have historically far outstripped wage growth, and the cost of living making saving for a deposit extremely hard. We're confident this is the first of many changes in the industry to help first time buyers as we see rates ease and lending appetite improve.
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Gabriel McKeown
Head of Macroeconomics at Sad Rabbit - Substack Newsletter
In a bold move to shake up the mortgage market, Halifax is throwing a lifeline to first-time buyers, turning the tide in a sea of financial obstacles. The introduction of a new LTI limit of 5.5 times the annual household income, a significant increase from the previous 4.5 times, not only addresses the immediate needs of FTBs but also sets a precedent that could influence other lenders to follow suit. By increasing LTI, Halifax is addressing the immediate needs of FTBs and setting a precedent that could influence other lenders to follow suit. As interest rates show signs of stabilising and property prices begin to soften, Halifax's move could not be more opportune. The market has seen a surge in first-time buyer activity, with affordability improving due to falling interest rates and new mortgage products entering the fray. The First Time Buyer Boost is a breath of fresh air in a market where FTBs often feel like running a marathon with no finish line in sight.
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Tony Castle
Managing Director at PFG Mortgages
This is really positive news for first-time buyers. Lenders like Halifax making big moves with 5.5 times income will really help drive the property market in the right direction. This is a move that could trigger other lenders to follow in their footsteps.
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Stephen Perkins
Managing Director at Yellow Brick Mortgages
This is a very welcome change from the UK's largest mortgage lender. Affordability has long been a limiting factor for many first-time buyers, despite monthly payments being affordable. Hopefully other lenders will follow suit and options at remortgage won’t be too restrictive for those using this boost.
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Justin Moy
Managing Director at EHF Mortgages
This is a very positive move by Halifax, matching the similar Helping Hands option from Nationwide Building Society that has been very popular for a number of years. It's important lenders look at new ways to help homebuyers, especially where there is surplus income that can be used, and not putting borrowers at risk of default. This is a good move by Halifax just at the right time.
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Craig Fish
Director at Lodestone Mortgages
A great improvement in policy from Halifax aimed specifically at first-time buyers, who are the life blood of the UK housing market. However, the devil is in the detail and with a minimum household income of £50k being required, it will alienate a few borrowers so this is more likely aimed at two person households. Despite this, it's a great improvement and now sits as a good alternative to the Nationwide's Helping Hand scheme.
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Rohit Kohli
Director at The Mortgage Stop
This is fantastic news for first-time buyers and is the type of thing lenders should be looking to do with interest rates reducing in recent weeks. The biggest challenge remains the level of deposit required and at 90% loan-to-value they will still need a hefty deposit to secure this product.
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Ken James
Director at Contractor Mortgage Services
Halifax Boldly going where no other lender dares to go.. Increasing lending for First time buyers. Do not get me wrong plenty of lenders are working hard to reduce rates and offer better options for customers, but what first time buyers and all buyers have been crying out for is more lending. Now we have the first lender who is specificaly targeting first time buyers and has set aside a substantial funding line to give them the Boost they need. It will be interesting to see if any other lenders follow in their footsteps. Kudos to Halifax once again leading the way.
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Scott Taylor-Barr
Principal Adviser at Barnsdale Financial Management
Whilst this is great news for many first-time buyers, it is (again) the market having to treat the symptoms, rather than someone in power treating the cause; the huge and ever-growing lack of property in the UK for people to buy and call home. It's great that Halifax and other lenders take such bold an innovative steps to try to help, but in the end we're just finding ways to lend people more and more money, rather than doing something about the cost of property in the places people want and need to live.