Regulators have opted to remove mortgage loan-to-income limits for lenders with a residential loan book of less than \u00a3150 million \u2013 meaning more smaller lenders don\u2019t have to abide by the rules.<\/p>\n
The LTI flow limit means the number of mortgage loans at an LTI ratio of over 4.5 times cannot make up more than 15% of the total of new mortgages per year.<\/p>\n
Previously the limit applied for those above the \u00a3100 million \u2013 a rule that has applied since 2024 \u2013 but from Friday that rises to \u00a3150 million.<\/p>\n
This means the number of lenders exempt from the rules will rose from around 70 to 80.<\/p>\n
The decision was made by the Prudential Regulation Authority and the Financial Conduct Authority.<\/p>\n
Rachel Springall, finance expert at Moneyfactscompare.co.uk, said: \u201cThis is a step in the right direction to give smaller lenders more scope to support borrowers, but for some it might not be as much relaxation as they were hoping.<\/p>\n<\/p>\n
\u201cThere have been no other changes stipulated at this time, which might disappoint those who were hoping for a change to the loan-to-income (LTI) flow limit.\u201d<\/p>\n
Last month, the CEOs from Yorkshire Building Society, Nationwide Building Society and Skipton Building Society both called for the LTI limit to be raised to 20% from 15% to allow them to lend to more potential homeowners.<\/p>\n
This was sent as a letter to the Treasury Committee and reaffirmed the point that building societies are responsible for 35% of first-time buyer lending.<\/p>\n
In April the FCA launched a consultation on increasing LTI limits \u2013respondents wanted higher thresholds of \u00a3200 million and \u00a3250 million, but the regulators opted for a more conservative approach.<\/p>\n
In a joint statement, the regulators said the update \u201caddresses the impact of inadvertent regulatory tightening due to growth in the UK economy since the threshold was first implemented\u201d.<\/p>\n","protected":false},"excerpt":{"rendered":"
Regulators have opted to remove mortgage loan-to-income limits for lenders with a residential loan book of less than \u00a3150 million \u2013 meaning more smaller lenders don\u2019t have to abide by the rules. The LTI flow limit means the number of mortgage loans at an LTI ratio of over 4.5 times cannot make up more than […]<\/p>\n","protected":false},"author":1,"featured_media":1341,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[2],"tags":[],"class_list":["post-1340","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-second-home"],"yoast_head":"\n