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First-time buyers will be able to apply for a mortgage with just a £30,000 salary with Nationwide (NBS.L) as the government and Bank of England (BoE) push for more relaxed lending rules.

The changes comes as chancellor Rachel Reeves revealed the "biggest set of reforms to financial regulation in a decade" at a summit of finance executives in Leeds this Tuesday, as part of the government’s mission to kick start economic growth and support more first-time buyers.

Under the plans, more mortgages will be available at over 4.5 times a buyer’s income following Bank of England recommendations that some banks and building societies offer more high loan-to-income mortgages — creating up to 36,000 additional mortgages for first-time buyers over the first year.

This change means that Nationwide will be able to make its "Helping Hand" mortgage available to people with lower incomes. From Wednesday, eligible first-time buyers can apply for the mortgage 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.

Nicholas Mendes , mortgage technical manager at broker John Charcol, said: “The decision to widen access to Nationwide’s Helping Hand mortgage by lowering the income thresholds will offer an immediate and practical benefit to a group of people who have often found themselves just on the wrong side of affordability criteria.

“For someone earning £30,000 on their own, or couples on a combined income of £50,000, this change could be the difference between continuing to rent and finally being able to move into a home of their own.

“It acknowledges the gap between headline figures and real life, and it shows a willingness to make the system better reflect the pressures people are actually under.

“It will also bring particular value to those in stable, lower-paid roles that are so essential to society but are often overlooked by traditional lending models.

“People working in care, education, retail, and public service are typically in long-term employment and manage their finances carefully, yet they are the very people who have found the doors to homeownership closed to them.

“This reform suggests that financial discipline is being recognised more broadly than by salary alone, and that is a very welcome shift.

This comes alongside the creation of a permanent mortgage guarantee scheme, ensuring high loan-to-value mortgages continue to be available, as well as a review of Financial Conduct Authority (FCA) lending rules that could allow a prospective buyers’ record of paying rent on time to show they can afford mortgage repayments.

Reeves said: "I welcome the recent changes the Financial Policy Committee has announced to the loan-to-income limit on mortgage lending, which the PRA (Prudential Regulation Authority) and FCA are implementing immediately.

“With an instant impact for consumers, such as Nationwide offering its ‘Helping Hand’ mortgage to more first time-buyers — supporting an additional 10,000 each year."

Henry Jordan, Nationwide’s director of home said: “Our changes mean more people, particularly those on lower incomes, could become eligible for a mortgage.

“We also hope our commitment to further lending provides a boost to the UK’s housebuilding ambitions as well as encouraging other lenders to increase support for those looking for a home of their own.”

Other measures were announced to improve the competitiveness of the UK financial sector under the Leeds Reforms, addressing long-standing industry complaints.

The chancellor added: “We now need to work together to bring these to life, to make sure – whether it is more first-time buyers getting access to mortgages, more businesses getting access to capital to start up, to scale up, and then ultimately to list in the UK – that is now our job.

“We’re giving you the tools we now need to work together to achieve that in reality.”

According to the Treasury, the changes will see Britain become the top destination for finance firms over the next decade, attracting inward investment from across the globe to create good, skilled jobs around the country.

Setting out the “Leeds reforms” in the West Yorkshire city, she told finance chiefs: “We are fundamentally reforming the regulatory system, freeing up firms to take risks and to drive growth.

“Second, we’re providing certainty for banks operating in the UK, and ensuring that UK banks have the ability to compete internationally and drive economic growth.

“Third, we’re doubling down on making the UK an innovation capital and the place of choice for fintechs to start up, to scale up and to list in the UK.

“Fourth, we’re seizing opportunities in areas where we are already world leading, including asset management, sustainable finance and specialty insurance.

“And fifth, we are delivering prosperity by increasing the firepower of our capital markets and boosting retail investment.”

The reforms were announced ahead of the chancellor’s Mansion House speech this evening.