The number of mortgage cases where at least one lender was available to meet the loan requirements of a self-employment applicant fell in February, according to findings from Mortgage Broker Tools (MBT).

The latest MBT Affordability Index revealed that 67% of self-employed cases processed through MBT Affordability had at least one affordability option, a level that fell from 71% in January.

In February, 31% of cases were deemed to be unaffordable based on the clients’ required loan amount while lenders were unable to lend on just 2% of cases.

The average maximum loan available to self-employed mortgage applicants dropped by just over 2% during the month, to £216,000, but the biggest change was the average minimum loan available – which fell by more than 18% to £96,935. MBT suggested this reflected a significant tightening of self-employed affordability criteria amongst some lenders.

“The self-employed continue to face a complex affordability landscape as more lenders tighten criteria for mortgage applicants in this group and the number of options reduces,” commented MBT CEO, Tanya Toumadj.

“We have also seen the spread between the average minimum available loan size and the average maximum available loan size widen to more than £119,000. For brokers who only try one or two lenders, this can give a false impression that their clients have no chance of achieving the loan size they require.

“However, it’s important to remember that there was at least one affordable option for more than two thirds of self-employed cases processed through the MBT Affordability platform in February.

“The message here is that the choice of lender makes a big difference to the amount a self-employed mortgage applicant can borrow, so brokers need to make sure they are considering all of the affordability options to ensure they are providing their clients with the most suitable recommendations.”

By contrast, across the whole of the market, MBT revealed that 79% of cases were affordable in February, which was slightly down from the peak of 80% in January.

There was at least one lender able to meet the loan requirements of 86% off first-time buyers, 84% of remortgage customers and 81% of home movers.

Toumadj added: “We often speak about the importance of whole of market affordability research, but it is more essential than ever in helping brokers secure the best outcomes for their clients, especially self-employed clients where calculations can be more complex and more varied.

“This is where a platform like MBT Affordability can help – empowering brokers through technology to quickly identify the lenders that will be most able to meet their clients’ lending requirements.”

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