The number of first-time buyers (FTBs) borrowing more than 4.5 times their income increased two thirds year-on-year following changes in regulation, Plum has revealed.

Data released via a freedom of information (FOI) request from the smart money app to the Financial Conduct Authority found that the number of FTB mortgages with loan-to-income (LTI) ratios of 4.5 times salary or above increased from 27,500 in 2024 to 45,800 in 2025, which is a 66% jump.

This included a tenfold increase in the number of FTB mortgages with LTI ratios of 5.5 times salary or above, from 420 in 2024 to 4,628 last year.

Plum said the figures coincide with a shake-up of lending rules.

In July last year, the Bank of England's Financial Policy Committee (FPC) recommended that regulators allow individual lenders to increase the volume of high LTI mortgage lending, having been previously capped at 15% of total lending.

As an interim measure, lenders were invited to apply for permission pending the outcome of a consultation.

Personal finance expert at Plum, Rajan Lakhani, stated: "Traditionally banks loaned four to four and a half times a first-time buyer’s income. But the loosening of lending rules means some lenders have offered loans of up to seven times their salaries if they meet certain criteria including high income and excellent credit scores.

"While the shake-up has been positive in allowing first-time buyers to get on the housing ladder quicker, there are different strategies out there for buyers who don’t want to take on more debt than they have to."

Furthermore, the FCA revealed that the number of FTB loans increased 16% year-on-year to 380,716 in 2025.

The trend was also consistent across sole and joint buyers, with FTB loans based on single incomes rising 17% to 174.769 and joint income loans increasing by 16% to 205,947.

Lakhani concluded: "The urgency to get on the housing ladder means first-time buyers are borrowing more, when ideally they would be trying to save more as well.

"A bigger deposit is often a greater weapon in the long-term than a bigger loan. For a start, the process of qualifying for a loan is often quicker for those with greater savings, and the cost of repaying the loan is usually cheaper.

"Having a bigger chunk of money saved usually means you can unlock lower interest rates and make considerable monthly savings."

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