Reeves hails ‘instant impact’ for aspiring homeowners as red tape is cut

She said it was “important it’s done in a sustainable and sensible way” whereby buyers are “confident of being able to… continue making those payments.”

The speech comes amid speculation about the prospect of tax rises in the Chancellor’s autumn budget after she insisted commitments not to increase taxes on “working people” remained.

Transport Secretary Heidi Alexander said on Sunday that people with “modest incomes” would be protected from hikes, prompting questions about the possibility of a wealth tax which the Government has not ruled out.

Asked to define “modest” in “salary terms”, Ms Greenwood said on Tuesday: “I think it means people who earn kind of around average income.”

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.

“Equally, the recognition that a person’s history of paying rent should be considered when assessing their ability to repay a mortgage is something many in the industry have been calling for over many years.

“If someone has shown, consistently and over time, that they can manage rental payments at a level equal to or even above the mortgage they are applying for, then it stands to reason that this should be considered a reliable indicator of affordability.”

Paula Higgins, chief executive of the HomeOwners Alliance, said the Government should “turn its attention to fixing the Lifetime Isa (Lisa)”.

She said: “Right now, anyone forced to withdraw their savings early faces an unfair penalty.”

Ms Higgins added: “And the £450,000 property price cap hasn’t moved since Lisas launched in 2017, despite soaring house prices, particularly in the South East.

“Reforming Lisas would make a real, practical difference to those trying to get on the ladder.”

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.”

Writing in the Daily Express, shadow chancellor Mel Stride said Labour “has taken a wrecking ball to the economy and they are making life increasingly difficult for people up and down the country”.

He said: “Rachel Reeves will no doubt claim today that her plan is working, that she is on the side of working people and that she will help people get on the property ladder.

“But all she is doing is giving with one hand whilst her Labour colleagues take with the other.

“If Keir Starmer continues to roll out the red carpet for migrants, British people will not see the benefit of more home ownership. An ever increasing number of properties will go to foreigners and their families.”