The number of affordable options for first-time buyers fell by 40% in 2023, new data from Mortgage Broker Tools (MBT) has indicated.

According to the research, which has been released for a dual-branded version of the Pepper Money Specialist Lending Study, 84% of all respondents believe the current economic environment will make it harder for them to get a mortgage.

MBT partnered with Pepper Money to provide analysis of broker activity on the research platform alongside the customer insights that were recently revealed in the specialist lender’s research study.

Research has also shown 89% of brokers said they have to work harder to secure the loan size their clients want as a result of the cost of living crisis. This is because they now have to look at a wider set of lenders to find the right fit.

Based on a number of typical customer profiles, MBT suggested the number of affordable options for first-time buyers borrowing at 90% loan-to-value (LTV) decreased by 40% in 2023, while the number of affordable options for customers borrowing at high loan-to-income fell by 27%.

“Continued high inflation is still causing pressure on household budgets,” said CEO at MBT, Tanya Toumadj. “However, this hasn’t ultimately had a real impact on borrowers being able to secure the loan size they want as the percentage of cases where there’s at least one lender able to provide the loan required remains stable at around 75%.

“However, what has changed is the range of options, with the average difference between the highest loan offered and lowest loan offered for the same customer increasing from £127,000 to £145,000.”

Business development director at Pepper Money, Ryan Brailsford, added: “It’s always interesting to analyse the results of our customer research against broker trends, and it’s clear that affordability is a key issue as household budgets continue to be squeezed.

“Our Specialist Lending Study found that some customers are considering downsizing to reduce their outgoings, whilst others have taken on additional employment to earn more income. Working with a lender that can properly consider all sources of income can help customers to achieve the affordability they need to secure the mortgage they deserve.”

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