Nationwide has announced it is increasing the maximum LTV available through its ‘Helping Hand’ mortgage to 95%, in a move intended to increase support for first-time buyers.

The society’s ‘Helping Hand’ gives first-time buyers the option of borrowing up to 5.5x income when taking one of the society’s five or 10-year fixed rate mortgages.

From tomorrow, it will now be available on mortgages up to 95% LTV, up from the original 90%. This means a first-time buyer couple with a joint income of £50,000 could borrow up to £275,000 rather than the £225,000 they could borrow with a conventional 95% mortgage, assuming no other costs are impacting affordability.

Nationwide stated that the move continues the society’s attempts to help “turn generation rent into generation buy”.

The change comes at a time when the house price to earnings ratio continues to rise. Over the last 10 years, this ratio for a first-time buyer has gone from 4.4x in Q4 2011, to 5.6x in Q4 2021. According to Nationwide House Price Index figures, the average first-time buyer house price has increased by 54% in that time – from £139,472 to £214,638.

“Alongside saving for a deposit, the ability to borrow enough on their mortgage continues to be a significant hurdle to home ownership,” commented Nationwide director of mortgages, Henry Jordan.

“As a mutual, we were founded to support people into their first home and that remains at the heart of what we do. We know that raising even a 10% deposit can be tough for some, which is why we are extending Helping Hand to our 95% LTV range and, in doing so, helping more people get a home of their own.”

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