Savills: Relaxed Stress Tests May Drive FTB Growth by Up to 24%

Buying your first home in today’s market isn’t easy — but it might soon get a little less difficult. As of March 2025, a change in Bank of England guidance has allowed lenders to relax mortgage stress tests, potentially unlocking homeownership for tens of thousands more buyers.

Major lenders, including Nationwide and Barclays, have already adapted their affordability checks, making it easier for first-time buyers to qualify for loans. New projections from Savills suggest that this shift could trigger a significant increase in home purchases over the next five years, alongside a rise in property prices — unless housing supply keeps up.

According to new analysis by Savills, the Bank of England’s decision to drop the requirement for borrowers to be stress tested at the standard variable rate plus 1% is set to have a major impact. Based on historical patterns between lending criteria and buyer activity, Savills projects that first-time buyer transactions could increase by between 47,000 and 80,000 over the next five years — an uplift of 14% to 24%.

The revised affordability assessments are designed to reflect today’s lower interest rate environment and evolving borrower profiles. However, this growth in buyer demand is also expected to put upward pressure on property prices. In scenarios of limited housing supply, house prices could rise an additional 5.0% to 7.5% beyond existing five-year forecasts.

“This is a long-term shift,” said Lucian Cook, Head of Residential Research at Savills. “While the immediate impact may be muted by broader economic uncertainty, the easing of affordability rules will widen the pool of buyers over time — with consequences for both price growth and housing delivery.”

For many aspiring homeowners — particularly those on contract incomes or freelance work — relaxed lending rules represent a long-awaited opportunity. But Savills also cautions that increased borrowing power may lead to stronger price inflation, which could limit gains in actual home purchases if affordability worsens.

“The more borrowing capacity pushes up house prices, the less benefit we may see in terms of transactions,” said Cook. He added that much will depend on how fast new homes are built to meet this fresh wave of demand — a challenge for a market already struggling to meet government housebuilding targets.

For now, buyer confidence remains mixed, with many still cautious about taking on new debt in a volatile economy. But over the medium term, this regulatory shift is expected to reshape the entry point for new buyers — making mortgage planning more essential than ever.

At Contractor Mortgage Solutions, we help contractors, freelancers, and first-time buyers understand how market changes like these affect their homeownership journey. Whether you’re preparing to buy or weighing your mortgage options, our team offers expert, contract-friendly advice to help you move forward with confidence.