New City minister summons lenders to urge take-up of looser mortgage rules

The newly-appointed City minister will summon the UK’s biggest banks and building societies to urge them to make use of looser lending rules to help first-time buyers get a home.

Lucy Rigby and housing minister Matthew Pennycook will gather senior executives from top lenders for a meeting on Wednesday.

Ms Rigby replaced Emma Reynolds as Economic Secretary to the Treasury, also known as City minister, after the latter’s appointment to Environment Secretary in Sir Keir Starmer’s Cabinet reshuffle last week.

The major shake-up was sparked by former deputy prime minister and housing secretary Angela Rayner’s resignation from Government following scrutiny of her tax affairs.

Ms Rigby is set to call on the bank bosses to make first-time buyers their top priority and to take advantage of measures outlined in the “Leeds reforms” package announced in July.

These include loosening lending rules to allow banks and building societies to offer more mortgages at 4.5 times a buyer’s income.

Labour said the move could create up to 36,000 more loans to first-time buyers in the first year.

Additionally, a review of Financial Conduct Authority lending rules could allow a prospective buyer’s records of paying rent on time to be used to show they can afford mortgage repayments.

Senior executives at Barclays, Lloyds, HSBC, NatWest, Nationwide Building Society and trade body UK Finance will be in attendance for the meeting at the Treasury.

Ms Rigby said she was “bringing lenders together to make mortgages more accessible and to highlight new options for first-time buyers”.

As City minister she is responsible for financial services policy and regulation.