With the largest building society in the UK enabling some borrowers to take out larger loans, mortgage lenders are stepping up their efforts to entice first-time buyers.

According to Nationwide, with a 5% down payment, new borrowers would be able to apply for mortgages up to six times their salary as of Tuesday.

However, it would only be accessible to individuals signing up for a fixed-rate agreement of five or ten years

Some people might only desire a fixed-rate loan for a shorter period of time if rates are predicted to drop. It is anticipated that London and the southeast of England would see the most uptake.

Candidates must nevertheless fulfill rather stringent requirements regarding affordability, which are determined on an individual basis.

Following the financial crisis that occurred over 20 years ago, lenders are also subject to their own set of regulatory regulations when it comes to lending to riskier customers.

In recent months, there has been an increase in competition across mortgage lenders.

Brokers claim that lenders are providing better offers to prospective home buyers than to existing mortgage holders.

Given the tiny number of buyers, suppliers are vying for market share.

One of the main areas of competition for house loans is first-time buyers, and Nationwide has been providing one of the highest so-called income multiples.

While a first-time buyer's loan may typically be obtained for up to 4.5 times their salary, Nationwide has let certain borrowers to borrow up to 5.5 times their income, a move that has been adopted by a number of other significant lenders.

It will now raise that threshold to six times, but only for first-time purchasers who make at least £30,000 annually as an individual or at least £50,000 as a pair.

Additionally, a little reduction in various mortgage interest rates as well as an increase in the maximum loan amount are planned.

The action was taken in response to a study by the Building Societies Association, of which Nationwide is a member, which said that first-time buyers were confronting the most difficult circumstances in seventy years.

It demanded that the market adopt new strategies, such as reducing lending restrictions in situations when borrowers could only provide a minimal down payment.

(Sources: bbc.co.uk)