Nationwide to lend first time buyers 5.5 x salary

[Hummingbird1236]

www.theguardian.com/money/2021/apr/20/nationwide-first-time-buyers-building-society-loans-earnings

Do you think this is a good idea or is it a big risk? I’m a potential first time buyer and whilst this kind of scheme would help me massively, it is a massive amount of money to borrow.

I think it's fine as long as the properties are valued properly.

It's frustrating when you are trapped by income multiples but could actually easily afford the monthly payment if they'd just give you the mortgage.

Things like this will need to happen as - certainly around where I am - most young families cannot afford a standard 3-bed semi without being able to borrow more.

@LemonadeFromLemons I think it would help us as we have a large deposit (over 20% for what we are looking at) but the problem is the amount x our wages we would be lent. We are just hoping for a one/ two bed starter home but in our area of the South East they are just so expensive!

Having said if they put their prices up more then no it won’t!

I don’t think it’s mad, just as PPs have said factors in the cost of a mortgage repayment v rent. For example, when DH and I moved in together in 2014, we were paying £1500 per month for a flat in London when our combined post-tax income was about £4000 a month. We then borrowed the max we could to buy a £300k flat, and our repayments were £1000 a month. We’re now in a £500k house and our monthly repayments are £1500 now, like our rent was back in those days, but we earn more like £6000 a month. So the landlord had no problem renting to us at a £1500 monthly cost, but we’ve had to earn 50% more before a bank would judge us as being able to afford that much. Even though we happily did 7 years ago. Bonkers.

(All London/SE prices there, I know things vary hugely across the country)

I’ve been in a similar situation to @Dollywilde
Crazy when I know I can afford way more (and have often paid more in rent!) than the bank will lend me.
Suppose rules iz rules. But frustrating nonetheless.

Actually not entirely sure how they work out their lending amount sometimes. I applied as a sole applicant, then as a joint one with DH. I was only offered £15k more on the joint mortgage, despite taking his income into account which it obviously wasn’t on my sole application.