The average house price has grown almost four times faster than the average maximum loan offered by lenders over the last 12 months, new research from Mortgage Broker Tools (MBT) has revealed.

Data from the MBT Affordability Index showed that the average maximum loan size offered by lenders was £243,400 in May, an increase of 2.5% on the average maximum loan size in May last year, when it was £237,500.

However, according to the latest Halifax House Price Index, the average price of a house in the UK during May was £261,743, representing annual growth of 9.5%. The figures mean the average UK home has increased in value by more than £22,000 over the last year.

The latest MBT Affordability Index also found that the difference between the maximum loan size and the smallest loan size available to an average customer with the same set of circumstances was £100,900 in May. This reflected a climb from £89,893 in May 2020.

MBT CEO, Tanya Toumadj, said: “The housing market reopened following the first national lockdown in May 2020 and, over the last 12 months, property prices have risen at their strongest level in nearly seven years according to the Halifax House Price Index.

“In the same period, mortgage lenders have increased their appetite to offer customers larger loans, but not nearly at the same rate. There is also a growing spread between the largest loan size that one lender might make available to a customer, compared to the largest loan size available from another lender.

“In this highly charged property market, it’s never been more important to conduct whole of market research to identify the most suitable lender that is able to help a buyer secure the loan they need to buy the property they want.”

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