Reeves to relax mortgage rules in bid to boost growth

Rachel Reeves is set to bet the house on hopes of finally achieving economic growth by easing rules on mortgages to make more loans available at lower salaries and at 4.5 times a buyer's income.

- DAVID MADDOX POLITICAL EDITOR

The chancellor is set to rip up many of the regulations brought in after the 2008 financial crash to encourage investors and businesses to take risks again (PA) The chancellor will use her keynote Mansion House speech in the City of London this evening to unveil plans to create up to 36,000 additional mortgages for first-time buyers over the first year. Just one lender - Nationwide - will give mortgages to 10,000 more first-time buyers as a result of the changes.

Changes will include lowering the minimum salary needed for a mortgage to £30,000 from £35,000 for an individual and to £50,000 from £55,000 for a couple on a joint income.

It is part of a wider package of reforms which will see a bonfire of red tape for financial services as Ms Reeves urges businesses and investors to “take risks again”, according to a Treasury source, following the caution which settled in after the 2008 banking crash.

But it comes as the new director of the influential Institute for Fiscal Studies (IFS), Helen Miller, is set to warn that despite Ms Reeves’s promises, the economy under this Labour government continues to “limp from fiscal event to fiscal event”.