Atom bank unveils LTI and LTV improvements to support first-time buyers

14 August 2024

• Digital bank has increased maximum LTIs for employed applicants with an annual income of £75,000 or more

• Maximum LTV available on flats, new-build flats and new-build houses in London and the South East increased

• Changes aimed at tackling the growing affordability issues facing first time buyers today, particularly in London and the South East

Atom bank, the UK’s first app-only bank, has made a series of improvements to its maximum loan-to-income (LTI) ratio and loan-to-value (LTV) limits in a move which will deliver greater support to aspiring homeowners.

The rate of house price growth in recent years has made getting onto the housing ladder ever more challenging for first-time buyers, as incomes have not increased at the same pace.

To address this, Atom bank has increased maximum LTIs for employed applicants with an annual income of £75,000 or more. For loans at 90% LTV or less, Atom bank will now lend up to six times the applicant’s income, while for those looking to borrow at above 90% LTV, Atom bank will lend up to 5.5 times the applicant’s income.

Helping buyers in London and the South East

Would-be homeowners face a particular challenge in getting onto the housing ladder in London and the South East, where properties are most expensive. In London for example, where the average property price currently stands at more than £523,000, would-be buyers face the prospect of setting aside more than £52,000 for a 10% deposit. Inevitably this means greater numbers are having to turn to support from loved ones.

In order to support first-time buyers in this region, Atom bank has increased the maximum LTV available on flats, new-build flats and new-build houses in London and the South East.

For both existing flats and new-build houses, the maximum LTV has risen from 90% to 95%, while for new-build flats the maximum LTV has increased from 80% to 90%.

The criteria changes take effect immediately.
Richard Harrison, Head of Mortgages at Atom bank, commented:
“First-time buyers are the lifeblood of the housing market - without them, it doesn't function properly. Yet would-be buyers face two significant challenges today, first in saving the initial deposit and then meeting affordability requirements, which can restrict the sums they can borrow.

“These changes are aimed at addressing those challenges, and mean we can support far more prospective buyers, both first-time buyers and those looking to move up the ladder. Higher LTI caps are an effective way to lend responsibly to those who can truly afford the repayments, not just now but in the years to come, while the new LTV caps for properties in the South East will open up properties in this particularly pricey region to more buyers.

“Atom bank has built a reputation for delivering what brokers and their clients truly need. We will continue to look for ways we can deliver lending that is faster, smoother and better value for money for mortgage borrowers.”