Committee publication · Correspondence · 7 January 2026
Letter from the Building Societies Association to the Chair dated 1 December 2025 concerning the Affordability of Home Ownership
From: Housing, Communities and Local Government Committee
Inquiry: Affordability of Home Ownership
Summary
The Building Societies Association writes to the HCLG Committee Chair following its November 2025 evidence session on home affordability. It clarifies how loan-to-income lending rules operate, outlines regulatory changes enabling greater lending flexibility, and highlights member innovations in mortgages for first-time buyers, including low-deposit options and family-assisted products. The BSA also notes increased branch presence since 2012.
Key findings
- LTI flow limit rule currently results in lending above 4.5× income at 8–9% rather than the 15% theoretical cap, due to lenders not operating in high-LTI space and building margin for error against fluctuating volumes.
- Leeds Building Society reduced minimum household income for 4.5× income mortgages from £40,000 to £30,000; Yorkshire launched '5.5× income' products at £50,000 minimum; Nationwide lowered thresholds from £35,000 to £30,000 (single) and £55,000 to £50,000 (joint), supporting an estimated 10,000 additional first-time buyers annually.
- Building societies offer mortgages up to 100% property value with parental collateral, deposits from £5,000, and self-employment mortgages with one year of accounts; consumer awareness remains low.
- PRA and FCA expected to consult on longer-term LTI policy changes in early 2026 following FPC recommendation update.
- Building societies have increased branch presence by 35% since 2012; branches are evolving into multi-purpose spaces with online/digital channels and some societies piloting multi-bank kiosks.
Tone
SupportiveTopics
Key actors
Building Societies Association, Florence Eshalomi, Robin Fieth, Financial Policy Committee, Prudential Regulation Authority, Financial Conduct Authority, Leeds Building Society, Yorkshire Building Society, Nationwide Building Society
Notable line
“This flexibility is already helping first-time buyers: • Leeds Building Society has reduced the minimum household income required for applicants to borrow …”
Key Quotes
“… the LTI flow limit rule is a macro-prudential safeguard designed to prevent too much high-risk borrowing building up across the mortgage market.”
“This flexibility is already helping first-time buyers: • Leeds Building Society has reduced the minimum household income required for applicants to borrow more than 4.5 times their annual income.”
“Building societies are strengthening the high street, increasing their branch presence up to 35% since 2012, even as many banks continue to close theirs.”
“Awareness of these products among consumers remains low. Over the coming months, we will be running a first-time buyer campaign to highlight these innovative offerings to both prospective borrowers …”
Source · parliament.uk record ↗