Mortgage market research more vital as affordability falls

Whole of market mortgage research has become more vital as rising property prices present fewer affordable loan options, research from Mortgage Broker Tools (MBT) has suggested.

The latest MBT Affordability Index revealed that the percentage of enquiries considered to be affordable has dropped from 80% in January, to just 73% in August.

Over the same period, the average property price has increased by more than £11,000 – according to the most recent Halifax House Price Index – rising 4.4% from £251,832 in January to £262,954 in August.

However, further analysis of the MBT data shows that in 21% of cases, the loan amount requested by a borrower is less than 5% away from being matched with an affordable option. MBT suggested this means that by considering a wider pool of lenders, many borrowers could be within touching distance of achieving the loan size they need to buy the property they want.

“The latest MBT Affordability Index shows that more mortgage enquiries are considered to be unaffordable than at the beginning of the year,” commented MBT CEO, Tanya Toumadj.

“However, buyers and brokers shouldn’t lose hope. Our data also shows more than a fifth of these cases that are considered unaffordable are less than 5% away from there being a suitable affordable option. So, there are opportunities for many borrowers to secure the loan they need, as long as they work with the best lender for their circumstances.

“With this in mind, it’s never been more important for brokers to carry out comprehensive and accurate affordability and criteria research before starting an application as this can prove the difference between a customer securing the property they want or being left disappointed.”

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