Reported data from the latest MBT Affordability Index has revealed that the ‘affordability gap’ – the difference between the loan amount requested and the loan offered – dropped to a record low of 15% in November last year.
This gap, where no lender is able to meet the loan amount requested by a broker, is far lower than the 21% seen last February and means brokers are more likely to be able to find a lender to meet the affordability criteria of the applicant.
Good news for first-time buyers
The picture is positive for first-time buyers as, when looking at specific sectors of the market, the data shows the affordability gap for this group has continued to fall, dropping to a record low of 10% in November, down from the previous record of 11% in October.
Not all positive
In comparison, the opposite trend was seen for home movers and remortgage customers, with the number of lenders unable to provide the loan amount requested rising for both groups.
Where lenders could not provide the loan requested by a broker, the gap between the loan amount sought and the amount offered has widened. In November, the average difference between the two was £23,185, the highest seen in 2020 and up from £15,000 last February.
Your home may be repossessed if you do not keep up repayments on your mortgage
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(Your home may be repossessed if you do not keep up repayments on your mortgage)
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