First-time buyers can now borrow up to seven times salary

For UK banks and building societies, the change widens the addressable market at a time when housing transactions have been subdued. Higher loan sizes per transaction also boost origination fees and interest income, brokers said. Some lenders have already raised multiples. Niche lenders and building societies have been the most aggressive. The big high-street banks are testing higher thresholds, brokers added.

The shift carries echoes of the pre-2008 era, when loose lending contributed to the financial crisis. The current relaxation is smaller in scale and comes with stricter affordability checks, including stress tests at higher rates. Still, the Bank of England has flagged that household debt levels bear watching.

"Taking a big income stretch is not going to be for everyone," Aaron Strutt of Trinity Financial said. "It is tempting because it gives them the option to get out of renting." Strutt added that borrowers need a cash buffer in case circumstances change.

The next test for the sector will come when the first cohort of borrowers on higher multiples refinance in five years, brokers said. If house prices soften or rates stay elevated, payment shocks could rise. The average UK house price was nearly £300,000 in the latest data, according to the Office for National Statistics.