Barclays has become the latest lender to alleviate its affordability stress test, allowing customers to borrow an additional £30,000 to buy a home.
High Street lenders said its affordability rate has been cut for residential purchases and cashing applications, and families can borrow up to £30,750.
Barclays’ figures are based on a family whose total income is £120,000 per year, credit card debt is £10,000, and other commitments of £600 per month, paying a two- or five-year mortgage that has a 35-year term.
Natwest, Lloyds Banking Group, Santander Hodge and Accord Mortgages have all simplified their affordability rules to allow more borrowing in recent weeks.
“We know people are facing many challenges right now, whether it’s first-time buyers trying to pay deposits or families looking to move.
“Increasing our affordability rate can help many clients dream of dreams while continuing to take strong measures to ensure they can pay on their mortgages.”
The companies’ moves came after financial conduct authorities said in March that lenders were “too cautious” to grant FTB home loans under current rules.
Financial Conduct Authority CEO Nikhil Rathi told the U.S. Treasury Commission that under existing regulatory rules, lenders have some degree of “flexibility” in their stress tests that apply to home buyers who first enter the market, but they have not exercised.
