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Helping first-time buyers step on the property ladder – even at 90% LTV
For many first-time buyers, the journey to home ownership feels tougher than ever. Rising house prices, the need for significant deposits, and stricter affordability checks from high street lenders all combine to make that first step a daunting one. Add to this the cost-of-living squeeze and the reality that many young buyers have short credit histories or incomes that don’t fit neatly into the boxes mainstream lenders expect, and it’s easy to see why so many find themselves stuck renting or relying heavily on family.
The challenges first-time buyers are facing
Saving for a deposit is one of the biggest hurdles. Even with family support, it can take years for first-time buyers to put aside the sums needed to satisfy lenders – particularly as rents remain high and eat into potential savings. Affordability checks present another obstacle. Many lenders cap borrowing at 4.5x income, and some reduce this even further at higher loan-to-value levels, limiting what clients can achieve even when their earnings should allow for more.
On top of this, many first-time buyers have little or no credit history. A lack of borrowing in the past or simply being new to work can result in a low credit score – not because of poor behaviour, but because of a limited financial footprint. For key workers, irregular income and shift allowances can add complexity, while in higher-value areas affordability as a sole applicant can be out of reach altogether.
How our criteria help
At Foundation Home Loans, our approach is designed to unlock opportunities that the high street often closes off. We lend up to 90% LTV, even on properties up to £750,000 which means clients don’t have to save quite as much as before moving forward with their plans. Gifted deposits are accepted from a broad range of family members, not just parents, widening the pool of support available to buyers.
For key workers, we offer enhanced affordability with income multiples up to 5.5x, and we’ll consider income from overtime, unsocial hours, and allowances. We also take a flexible, case-by-case approach to affordability, recognising that not every borrower will have a perfect credit profile. Instead of rigid scoring, we place cases across our credit tiers, enabling us to support clients with minor blips or limited histories without penalising them unfairly.
Most importantly, our manual underwriting means we can look at the full picture of each client’s circumstances, rather than relying on tick-box rules that don’t reflect real life.
How we helped real-life clients
This flexibility makes a real difference. A newly qualified paramedic earning £32,000 a year with a 10% deposit saved was struggling to borrow enough under mainstream criteria. High street lenders capped borrowing at around 4.5x income, leaving them short of what was needed to buy a suitable property in their hometown. With our 90% LTV 5-year fixed key worker product, we were able to offer borrowing up to 5.5x income while including shift allowances, enabling them to purchase their first home without compromise.
In another case, a first-time buyer earning £30,000 a year wanted to buy a £250,000 flat but fell short when assessed on their income alone. Their parents were able to help but didn’t want to be named on the property for stamp duty reasons. Our 90% LTV joint borrower sole proprietor product provided the perfect solution, allowing parents to be included in the mortgage without being included in the deeds. This boosted affordability while preserving the buyer’s first-time buyer benefits.
And in higher-value areas, gifted deposits from extended family often make the difference between renting and buying. By accepting contributions beyond immediate parents, we give brokers greater flexibility to place these cases and help more first-time buyers secure a home in the communities where they want to live.
Opening the door to home ownership
The first step onto the ladder is rarely straightforward, but with products to reflect today’s realities, Foundation Home Loans is helping more brokers say yes. From enhanced affordability for key workers, to flexible support for buyers with gifted deposits or limited credit histories, our aim is simple – to make sure that first-time buyers aren’t excluded by rigid rules.
If you’ve got a client who doesn’t quite fit the high street mould, talk to your Regional Area Manager today. We’re always happy to work through the details and find the right solution to help them take that important first step.
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