Following mortgage reform measures announced by the UK chancellor Rachel Reeves in July 2025, tens of thousands more hopeful first-time buyers are now expected to be able to get onto the property ladder each year. For people who have been saving for a deposit but struggling with their first-time buyer mortgage eligibility, the government’s changes will enable more banks and building societies to offer high loan-to-income mortgages, targeting buyers on lower incomes.

In partnership with the experts at New Homes Mortgage Helpline we explain the chancellor’s mortgage reforms and what they could mean for you if you’re planning to buy your first home.

What were the mortgage reform measures announced by the chancellor?

Following a recommendation from the Bank of England that banks and building societies increase the availability of high loan-to-income mortgages, the chancellor announced that more mortgages will be available at more than 4.5 times a buyer’s income. This could create up to 36,000 additional mortgages for first-time buyers in the first year of the changes.

The mortgage guarantee scheme, introduced by the previous administration came to an end in June 2025, and has now been replaced by the new 2025 Mortgage Guarantee Scheme in line with a statement made in February. The scheme is intended to support homebuyers who have saved a minimum of 5% deposit, through increasing the number of 95% mortgages on the market.

What is a high loan-to-income mortgage?

Presently, most mortgage lenders cap their lending at 4.5 times the borrower’s income. This is called your ‘loan-to-income (LTI) ratio’ and is calculated by dividing the amount that you want to borrow for a mortgage by your annual income; if you’re looking to buy a home with someone else, the calculation will include their income too.

While the 4.5 times salary cap is typical, some lenders offer ‘high loan-to-income mortgages’ and will lend up to 5 or even 6 times the borrower’s income, although up to now they have been primarily reserved for higher earners. The increase to the availability of high LTI mortgages includes those for first-time buyers, so people with plans to get onto the property ladder may be able to borrow more and secure the home they really want, or be eligible to enter the home-buying market in the first place.

There are also changes to individual mortgage schemes that have been enabled by the government’s reforms. Nationwide’s ‘Helping Hand’ scheme can be extended to more first-time buyers on lower incomes, as people with incomes of £30,000 can now apply, reduced from £35,000; joint applicants will be eligible with a combined income of £50,000, previously £55,000. According to the government, these adjustments alone are predicted to make 10,000 people eligible for a first-time buyer mortgage.

Next steps for first-time buyers to get onto the property ladder

If the government’s mortgage reforms are motivating you to get onto the property ladder sooner, and you have saved for a deposit towards your first-time buyer mortgage or are fortunate to have received a gifted mortgage deposit, a recommended next step is to speak to an independent mortgage advisor to discuss your personal financial circumstances and find out how much you could afford to borrow for a mortgage, and the products that are currently available to you.

When your heart is set on a new-build home for your first property, the New Homes Mortgage Helpline can provide you with tailored advice to support you in securing the home you want. Their expert advisors can also help you to understand changes to the mortgage market, such as the impact of the government’s mortgage reforms, and the Bank of England’s updated guidance on mortgage stress tests as announced earlier this year.

You can then search for your nearest Bellway developments to begin the exciting process of finding your dream new-build home. Every new Bellway home is a perfect blank canvas, ready to move into as soon as you get your keys with no redecoration or renovation required, and energy-efficiency built in to keep your utility bills low all year round – just some of the great reasons to buy new with Bellway.