Changes in the rules for the affordability of mortgage have placed 51,000 extra houses within the reach of first buyers, new research suggests.
The analysis of Leeds Building Society shows that, under the current credit criteria, up to 65% more houses in England and Wales have become affordable for first buyers.
The lender used retrospective land registration data for the year until July to estimate the impact on affordability.
It turned out that the criteria changes 143,017 would have placed within the reach of first buyers compared to 86,915 earlier.
The changes by the Prudential Regulation Authority in July, lenders gave greater flexibility about the share higher loan to income (LTI) mortgages that they can offer.
Leeds says that his own adjustments mean that buyers with an annual income of £ 30,000 now have access to mortgages up to 95% loan to value and borrow to £ 165,000, to buy a house worth a maximum of £ 173,000.
Prior to the changes, the same borrower could only have paid a house with a value of a maximum of £ 141,000.
Leeds has also reduced its stress speed.
Other initiatives that it has launched to support first buyers include the Income Plus range, which offers up to 5.5 times LTI, and the reach range for borrowers with lower credit scores.
Leeds Building Society Director of MortGage Distribution Martese Carton says: “Affordability remains a challenge for many potential homeowners, with house prices that still exceed wage growth in different regions.
“But brokers must be reassured to know that an income of £ 30,000 is sufficient to help their customers realize their dreams of their homeowners.”
Mortage Advice Bureau Strategic Lender Relationship Director Rachel Geddes adds: “It is an unmistakable fact that affordability remains the biggest obstacle for prospective homeowners.
“Our research shows that 65% of the tenants want to buy, but a discouraging 27% believe that home ownership is completely out of reach.
“The truth is that many prospective buyers simply do not realize that they are able to step on the real estate ladder.
“Our task as brokers is to change this story and to increase awareness of the available innovative mortgage products.”