High-LTI lending to first-time buyers more than doubles in a year

The number of first-time buyers (FTBs) taking out mortgages at the highest income multiples has more than doubled in a single year — the clearest evidence yet that the loan-to-income (LTI) rule changes introduced in 2025 are reshaping access to homeownership at scale.

The Financial Conduct Authority (FCA) data obtained by Stonebridge, the mortgage and protection network, under a Freedom of Information Act request shows that FTB lending at 5.5 times income or above rose 142.2% to 7,621 loans in the year to the end of June 2026 — the first full year since regulators relaxed the LTI flow limit. Combined high-LTI FTB lending above 4.5 times income climbed 44.7% year-on-year to 56,460 loans.

The change was confirmed in policy statement PS19/26, published on 14 October, which scrapped the rule that stopped individual lenders from writing more than 15% of new residential mortgages at income multiples of 4.5 times earnings or above, with the change coming into force on 28 October.

Beyond the numbers: what the mix tells advisers

Total FTB mortgage sales over the same period rose just 3.1% to 375,657. The surge in high-LTI lending has not been driven by a wider market boom. It has emerged within a broadly flat overall FTB market. That means the policy change is redistributing who can buy, and where, more than it is adding buyers in aggregate.

For advisers, that distinction matters. Clients who can demonstrate strong affordability but previously hit a ceiling at 4.5 times income now have a material new option, particularly in higher-cost regions where the gap between earnings and property prices has historically shut out otherwise creditworthy borrowers.

Rob Clifford, chief executive at Stonebridge, said the data underlines how consequential the shift has been. “More accommodating loan-to-income rules are proving to be game changing for large numbers of borrowers, particularly aspiring homeowners,” he said. “Borrowers have a greater chance of actually buying the property they really want, and stretched first-time buyers can get on the property ladder sooner or in areas they could only dream of living.”

The adviser’s role in a more complex market

Non-FTB mortgages above 4.5 times income also rose 56.6% year-on-year to 58,835, with lending between 4.5 and 5.5 times jumping 64.3% to 49,936. The high-LTI shift is not confined to first-time buyers. It is restructuring the accessible market more broadly.

That breadth creates an advisory challenge as well as an opportunity. The industry-wide LTI flow limit remains in place as an aggregate constraint, meaning individual lenders can still reach capacity. The practical effect is a more variable, lender-by-lender product landscape — one that rewards thorough sourcing and penalises assumptions about availability.

Clifford is unambiguous that the opportunity carries real responsibility. “Advisers need to keep in mind that the flow limit still applies across the industry as a whole, but the availability of high-LTI loans, or lack of them, is no longer quite so black and white,” he said.

“However, they’re not a silver bullet. Higher borrowing won’t be right for everyone and, where one is being considered, borrowers’ financial circumstances need to be studied in detail. The number of borrowers, the size of their deposit, their employment circumstances and arrangements to protect their ability to stay in the home should they become too ill to work all have to be carefully weighed.”

His point carries an implication for advisers with a protection offering. A client stretching to 5.5 times income is precisely the borrower for whom an income protection or critical illness conversation is not a box-tick. It is central to whether that mortgage is sustainable.

A market transformed, with more to come

The Prudential Regulation Authority (PRA) has stated that the changes will “reinforce financial inclusion” by supporting first-time buyers struggling to save a large deposit, and considered that an increase in high-LTI mortgages could meet previously unmet demand from creditworthy individuals on average or lower incomes.

For mortgage advisers, that means the landscape will keep shifting. Those who understand both the opportunity and its limits — who can identify the right client, source across a lender-by-lender market and pair a stretched borrowing decision with the right protection conversation — are best placed to serve buyers in the new environment. The data shows the door has opened significantly. How far it opens from here depends, in no small part, on how the advice profession rises to meet it.