The affordability gap dropped to a record low of 15% in November, according to data from the latest MBT Affordability Index.
Mortgage Broker Tools (MBT) stated that the affordability gap, where no lender is able to meet the loan amount requested by a broker, peaked at 21% in February.
The affordability and criteria platform for advisers said this means that brokers are more likely to be able to source a lender to meet the loan affordability requirements of their clients than they were earlier in the year.
However, where lenders are unable to provide the loan requested by a broker, the index showed that 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 – having risen from £22,450 in October, and a low of £15,000 in February.
The data also revealed the affordability gap for first-time buyers hit a record low of 10% in November, down from the previous record of 11% in October.
“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,” said MBT CEO, Tanya Toumadj. “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.”
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