Major mortgage rules shake up could help first time buyers get on property ladder
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A MORTGAGE rules shake up could help first time buyers get on property ladder more easily. The proposed changes come after financial regulators were told by Chancellor Rachel Reeves that they needed to adapt a "pro-growth" agenda. Ahead of this, Reeves and Prime Minister Keir Starmer also wrote to over a dozen regulators encouraging them to come up with five reforms to support the economy in the coming year.
![[File photo dated 12/09/18 of models houses on a pile of coins and bank notes. The Government is being urged to scrap Lifetime Isa penalties for first-time buyers in the autumn Budget as it emerged some savers are being charged at least ¿11,000 to withdraw their cash. Issue date: Thursday October 3, 2024. PA Photo. Data obtained from HM Revenue & Customs (HMRC) and published by money app Plum showed that in the tax year 2022-23 the average of the top 25 penalties paid for unauthorised withdrawals was ¿11,000. See PA story MONEY Savings. Photo credit should read: Joe Giddens/PA Wire]](https://www.thesun.co.uk/wp-content/uploads/2024/10/MONEY-Savings-07011306jpg-JS937953363.jpg?strip=all&w=960)
Since stepping into the role, the head of finance for the UK has faced pressure to help improve economic growth in the country following years of financial instability. Fresh figures published by the ONS on Thursday also showed that the economy grew by just 0.1% in November, less than expected by economists.
To help spur on growth, bosses in the industry are said to be thinking about scrapping the £100 limit on contactless payments and allowing banks to set their own limit, letting customers make bigger purchases. And regulators are also said to be looking at ways to ease mortgage rules to improve the economy and help first time buyers get on the ladder.
One of the ideas reportedly floated was to allow banks to give more loans to buyers with smaller deposits. Regulators are also examining the rules which limit how much first time buyers can borrow. Currently, mortgage lenders are only allowed to lend 15% of their loan book to people whose property is worth 4.5 times their annual salary.
