The UK property market is set for a significant boost as multiple factors combine to improve mortgage affordability and increase buyers’ purchasing power, it has been claimed.
The recent Bank of England base rate cut to 4.25%, relaxed stress testing from lenders and the return of competitive mortgage pricing are all working in tandem to stimulate buying activity.
Specialist lender Hodge has become the latest to join this trend, reducing its affordability stress rate across its product ranges.
Emma Graham, Business Development Director at Hodge (pictured), says: “This change will unlock nearly 20% more borrowing potential for the average Hodge customer.”
The impact of the change is substantial. Joint applicants earning £45,000 will now be able to borrow over £38,000 more – a 17% increase – while customers with incomes of £75,000 can benefit from almost 20% more borrowing capacity.
Affordability can often be the last major hurdle after years of saving for a deposit.”
Graham notes in particular, the effect it will have on late-life first-time buyers. She says: “Affordability can often be the last major hurdle after years of saving for a deposit. These buyers, often in their 30s, are typically seeking homes in family-friendly areas with the space to support growing families. This increase in borrowing power could mean the difference between a two- and three-bedroom property.”
And, according to Savills’ May 2025 Housing Market Update, affordability changes “will enable buyers to borrow more, according to Halifax, up to 13% more than previously.”
This comes as sub-4% mortgage rates have returned to the market for buyers who qualify for lower loan-to-value products as lenders compete for business.
Remortgaging easier
At the same time, as was reported in The Neg, there are also plans to scrap affordability checks for homeowners looking to remortgage, enabling them to switch more easily to cheaper deals.
The changes come at a crucial time. The ending of the Stamp Duty holiday on April 1st and Trump’s tariffs and the economic uncertainty it has generated have resulted in a cooling of the market.
Industry experts believe improving access to cheaper finance will counterbalance these factors.
Savills, though, cautions that without increased housing supply, this greater buying power could “translate into greater house price inflation than increased accessibility to home ownership.”
