Homebuyers will offered mortgages at more than 4.5 times their income under plans to help people get on the housing ladder.

Chancellor Rachel Reeves will announce the new loan-to-income ratio among a series of reforms to financial regulation.

The Financial Conduct Authority has unveiled changes to the rules governing fundraisings by listed companies. The regulator said its “stripped back” regime would make it easier and less expensive for quoted businesses to raise funds and would bolster the international competitiveness of the City of London.

Its moves comes ahead of the Chancellor’s address to finance executives in Leeds as part of the Government’s mission to kick start economic growth.

Red tape holding back the competitiveness of the UK financial sector will be swept away under the Leeds Reforms, addressing long-standing industry complaints.   

The changes aim to make Britain become the top destination for finance firms over the next decade, attracting inward investment.  

The mortgage change will mean eligible first-time buyers can apply with a £30,000 salary, down from £35,000, and joint applicants with a £50,000 combined salary – down from £55,000. This will support an additional 10,000 first-time buyers each year.  The reforms will create up to 36,000 additional mortgages for first-time buyers over the first year.

This comes alongside the creation of a permanent mortgage guarantee scheme, as well as a review of Financial Conduct Authority lending rules that could allow a prospective buyers’ record of paying rent on time to show they can afford mortgage repayments. 

There are also changes to force banks to inform savers of investment opportunities that will encourage them to take more risk that offers the prospect of higher returns.

The reforms will be unveiled ahead of the Chancellor’s Mansion House speech tonight. She will say: “Today, I have placed financial services at the heart of the government’s growth mission. 

“Recognising that Britain cannot succeed and meet its growth ambitions without a financial services sector that is fighting fit and thriving.”

Jason Windsor, Aberdeen Group CEO, said: “Aberdeen and interactive investor have long highlighted the benefits of saving and investing for UK individuals and institutions, so we are pleased to see the government laying the foundations to help build a healthy culture of investing here in the UK.

“The government’s strategy draws from Aberdeen research which showed that UK adults hold only 8% of their wealth in investments, the lowest of any G7 country.

“That’s why it is so important to create sustained public awareness, backed by Government, and with financial education at its heart. As more people are encouraged to invest, our job is to make it simple and easy for them to access the information and services that they need to do so with confidence.”

Barratt Redrow says consumers still cautious

Britain’s biggest homebuilder Barratt Redrow said it had seen some improvement in mortgage market competition and availability but underlying private sales activity has remained sensitive to consumer caution, driven by the economic backdrop and the ongoing affordability challenges faced by homebuyers. 

Its shares fell after it emerged it would have to pay up for remedial works on some projects.

In a trading update, David Thomas, chief executive, commented: “Against a challenging market backdrop, we have delivered a solid performance this year.

“Our adjusted profits are in line with market expectations, despite home completions being slightly below our guided range, mainly due to the impact of fewer international and investor completions than expected in our London businesses.

“We are already seeing tangible benefits from the Redrow acquisition, with cost synergies being delivered ahead of schedule, a new divisional structure in place and revenue synergies progressing well

“Although demand during the year has been impacted by consumer caution and mortgage rates not falling as quickly as hoped, there remains a long-term structural under-supply of housing in this country.

“Our increased scale, three market-leading brands and strong land pipeline put us in a unique position to rapidly accelerate volume delivery as consumer confidence strengthens and the benefits of planning reform materialise at a local level.

“We remain confident in our medium-term ambition to deliver 22,000 high-quality homes a year, and in the long-term demand for our high-quality homes.”

However, Chris Beauchamp, Chief Market Analyst at IG, said : Barratt Redrow’s flat share price over a decade reflects not just policy headwinds but the company’s own failure to adapt. It’s been slow to reduce London exposure, late on cost control, and is now burdened with merger complexity and legacy liabilities.”