The affordability gap fell to a record low of 15% in November, according to the latest MBT Affordability Index.
The affordability gap, where no lender is able to meet the loan amount requested by a broker, reached its lowest ever level of 15% in November, having peaked at 21% in February.
However, where lenders are unable to provide the loan requested by a broker, the gap between the loan requested and the loan amount offered has widened. In November, the average difference between the loan requested and maximum loan offered was £23,185, which is the highest figure for the year – up from £22,450 in October and a low of £15,000 in February.
Focusing on different sectors of the market, the affordability gap for first-time buyers also hit a record low of 10% in November, down from the previous record of 11% in October. However, home movers and remortgage customers saw the opposite trend in November, with the number of lenders unable to provide the loan amount requested increasing in both categories.
Tanya Toumadj, CEO at Mortgage Broker Tools, said: “The affordability gap is a really important trend to track as it shows brokers how likely it is that they will be able to source a lender to provide the loan amount requested by their client. The fact that this gap has dropped to its lowest level since we started monitoring the market is therefore great news for brokers and their clients.
“However, there is also a warning for brokers within the data, because where they are unable to secure the loan requested by their client, the difference between the loan requested and maximum loan offered is at its highest level since records began. For brokers who may only try one or two lenders, this can give a false impression that they will not be able to achieve the required loan amount, even though there could be plenty of suitable options if they were to shop around. This is why whole of market affordability research is such an important element in helping brokers secure the best outcomes for their clients. A platform like MBT Affordability can make this process quick and easy, helping brokers to identify the lenders that will be most able to help their clients meet their objectives.”
