Chancellor Rachel Reeves is preparing to unveil a set of financial reforms aimed at expanding homeownership opportunities.

At a finance industry summit in Leeds tomorrow, Reeves will outline plans to relax mortgage lending rules as part of a broader regulatory overhaul.

Dubbed the “Leeds Reforms”, the package is designed to tackle what the Treasury describes as “long-standing industry complaints.” One key change will see lenders permitted to offer more mortgages at higher loan-to-income (LTI) ratios — above 4.5 times a buyer’s income. Officials estimate this adjustment could unlock up to 36,000 additional mortgages for first-time buyers in the scheme’s first year.

Currently, Bank of England regulations cap high LTI mortgages to 15% of a lender’s new loans annually. However, following a recent recommendation from the Bank’s financial policy committee, individual lenders will now have greater flexibility to increase their share of high-LTI lending, provided the overall market remains within that 15% cap.

The Treasury says this will enable Nationwide Building Society to widen access to its Helping Hand mortgage. From Wednesday, the income threshold for eligible first-time buyers will drop from £35,000 to £30,000 for individual applicants, and from £55,000 to £50,000 for joint applications — a move expected to help around 10,000 extra first-time buyers every year.

In addition, the government will introduce a permanent mortgage guarantee scheme, aimed at ensuring high loan-to-value mortgages remain available, even during periods of economic uncertainty.

Ministers are also considering reforms to Financial Conduct Authority lending rules, potentially allowing renters to use a history of timely rent payments as evidence of their ability to manage mortgage repayments.

After announcing the changes in Leeds, Reeves will travel to London for the annual Mansion House speech. In her address to the City, she is expected to endorse the new LTI reforms and highlight the swift consumer benefits, including Nationwide’s expanded offer.

“Today, I have placed financial services at the heart of the government’s growth mission,” she is set to tell attendees. Recognising that Britain cannot succeed and meet its growth ambitions without a financial services sector that is fighting fit and thriving.  And I have been clear on the benefits that that will drive. With a ripple effect that will drive investment in all sectors of our economy and put pounds in the pockets of working people”, - Reeves is expected to say.