Nationwide will resume lending against flats at 95 per cent loan to value (LTV). It had previously restricted the loan levels for this kind of property at the height of the pandemic.
The lender made the decision not to lend against flats at this tier due to market uncertainty, and limited the maximum LTV to only 85 per cent.
Nationwide said the change would help first-time buyers as around 25% purchased flats in 2022, this compares to less than 10% for existing home movers. It said it would be even more beneficial to first-time buyers in urban areas such as London, where more than 35% bought flats.
Henry Jordan, director of home at Nationwide Building Society, said: “We are pleased to be able to return to higher loan-to-value lending on flats – a move that predominantly supports the first-time buyer market.
“With flats representing one in four purchases for first-time buyers, we hope this decision gives more options for those looking to get onto the property ladder.”
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