The affordability gap for first-time buyers dropped to a record low of 11% in October, according to data from the latest Mortgage Broker Tools (MBT) Affordability Index.
The affordability gap for first-time buyers dropped to a record low of 11% in October, according to data from the latest Mortgage Broker Tools Affordability Index.
The data shows that the affordability gap peaked in April 2020, at 24%.
Tanya Toumadj, chief executive at Mortgage Broker Tools, said: “The affordability gap shows brokers how likely it is that they will be able to source a lender that can provide the loan amount requested by their client.”
For the whole of market, the affordability gap remained at 16% for the third consecutive month.
However, it dropped slightly for home movers, from 18% to 15% and nudged downwards for remortgage customers from 13% to 12%.
The gap between the loan requested and the loan amount offered is widening.
In October, this difference reached its highest in 2020, at £22,450, up from £20,538 in September.
Toumadj said: “Where brokers were unable to secure the loan requested by their client, the difference between the loan requested and loan offered is as high as it has been since we started analysing the data.
“This can give brokers a false impression if they only try one or two lenders and find that the loan amounts offered fall well short of their expectations, when really there are many lenders that could be able to meet the loan size requested."
