The MBT research suggested a considerable drop in the number of 90% LTV mortgage options available to FTBs, with a 40% decline reported last year
The availability of affordable housing options for FTBs in the UK saw a significant decline in 2023, as per recent data from Mortgage Broker Tools (MBT) released in conjunction with the Pepper Money Specialist Lending Study.
The MBT research suggested a considerable drop in the number of 90% LTV mortgage options available to FTBs, with a 40% decline reported last year. Similarly, those borrowing at higher loan-to-income ratios experienced a 27% drop in affordable options.
MBT, in collaboration with Pepper Money, offered an in-depth analysis of broker activity and customer insights, highlighting the challenges faced by prospective homeowners in the current economic climate.
The Specialist Lending Study revealed that 84% of the respondents believe the prevailing economic conditions will complicate the process of obtaining a mortgage, while the MBT Affordability Report found that around nine out of 10 brokers, or 89%, are finding it increasingly difficult to secure the desired loan amounts for their clients, largely because of the ongoing cost-of-living crisis.
Continued high inflation is still causing pressure on household budgets, said Tanya Toumadj, chief executive at Mortgage Broker Tools. However, this hasn’t ultimately had a real impact on borrowers being able to secure the loan they want as the percentage of cases where there’s at least one lender able to provide the loan required remains stable at almost 75%.
She added: 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.
Ryan Brailsford, business development director at Pepper Money, stressed the importance of understanding the correlation between customer experiences and broker trends, especially in light of the affordability challenges aggravated by squeezed household budgets.
He said: Our Specialist Lending Study found that some customers are considering downsizing to lower their outgoings, while others have taken on additional employment to earn more. Working with a lender that can consider all sources of income can assist customers to achieve the affordability they need to secure the mortgage they deserve.