MBT Affordability Insights: Will lenders ease affordability?

“For the first time in many years, customers are grimacing at new mortgage payments, house prices remaining high and wages far from inflation”

For the first time in many years, customers are grimacing over new mortgage payments, house prices remaining high and wages far from inflation, the market is showing all signs of slowing, with more emphasis on mortgage business as borrowers worry about the future. Additionally, recent research showed that 16 lenders were willing to lend 5 times their income or more for a 75% LTV case, although in cases where the client’s income was in the six figures, but that was before the recent announcement by the Bank of England.

Research also shows that low-income customers are negatively affected from an affordability perspective due to increased ONS figures and that higher rates will only make the situation worse. Analysis of data from thousands of cases studied by MBT Affordability in April showed that 29% of mortgage applicants with a household income of less than £62,000 were offered a loan of less than the amount they they had asked. This compares to just 12% of mortgage applicants with household incomes between £62,000 and £100,000.

At this point, it’s still unclear what stress rates lenders will move to and how quickly, but it’s likely most will first wait to see how the market develops over the next few months before deciding where they need to go. be. As a result, we’ll likely see the gap between low- and high-income customers widen even further.

We are unlikely to see 7x revenue very soon, if ever. But one thing the past few years have taught us is that the future is completely unpredictable. In this uncertain environment, detailed data analysis is even more vital for lenders in defining their affordability calculators and thorough research across the entire market is a necessity for any broker who wants to secure the most affordable mortgage. appropriate for his client.

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