What are Rachel Reeves’ Mortgage Market Reforms?

On 15^th July, The Chancellor Rachel Reeves announced what she termed “the biggest series of reforms to homebuying regulation in a decade”. But what are Rachel Reeves’ mortgage market reforms? And what do the changes mean for First Time Buyers and other home buyers? We discuss in our latest article.

Why has The Chancellor made these changes?

For some time, it has been difficult for First Time Buyers to get a foot on the property ladder. Often, this isn’t because they are not financially stable, rather because lending rules prevented them from borrowing enough.

In order to boost home ownership, especially among First Time Buyers, the Chancellor is looking to remove some of the “red tape” around the mortgage market. Rachel Reeves’ Mortgage Market reforms are therefore aimed at increasing mortgage availability.

Her announcements follow recent recommendations from the Bank of England’s Financial Policy Committee which concluded that lenders could be given more flexibility over lending to people with a higher loan to income ratio*.

What are the details of the Mortgage Market Reforms?

The reforms announced are as follows**:

• Higher loan to value: Lenders will be able to offer more high loan to income mortgages, allowing up to 36,000 additional First Time Buyers to access lending over the first year since the reforms.
• Permanent Mortgage Guarantee Scheme: The previous Mortgage Guarantee Scheme ended in June. The government has introduced a new, permanent Mortgage Guarantee Scheme. The scheme will be available to lenders from July 2025, helping to support homebuyers with a deposit as small as 5%.
• The ‘Helping Hand’ mortgage will be made available to more First Time Buyers which is projected to support an additional 10,000 each year.
• Recommendation to the FCA that they review lending rules, including using rent payment history as evidence for mortgage affordability.

If you are interested in learning more about whether you can afford to purchase a home, we would advise you speak to a Mortgage Broker like Your Mortgage Expert.

Not only do we have access to the current deals on the market, some of which are not available to First Time Buyers directly. We also have extensive knowledge of all the current Government schemes designed to give you a helping hand.

Interested in Shared Ownership? We can help. Only have a small deposit? We can advise you on that as well.

By speaking to Your Mortgage Expert, you’ll get access to expert first time buyer mortgage advice. We can help you work out how much you can afford to borrow, what your repayments would be and what type of mortgage is most suitable for your personal circumstances. And, if you need it, we can break down all the jargon so you understand whether to opt for a tracker mortgage, fixed rate mortgage or something more flexible.

Contact us today for a free, no obligation conversation.

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*Source: https://www.bbc.co.uk/news/articles/cj0mny9pm2do

**Source : https://www.gov.uk/government/news/reeves-to-cut-financial-red-tape-to-boost-homeownership