Research budget

Affordability for the self-employed is improving

There is at least one lender available to meet the loan requirements of self-employed mortgage applicants 71% of the time, according to the MBT Accessibility Index.

MBT Affordability Gap data from January shows that 71% of self-employed cases handled through MBT Affordability were affordable, 27% were deemed unaffordable, and the lender was unable to lend in 2% of cases.

The average maximum loan offered to self-employed mortgage applicants was £ 221,400 in January this year, down more than 3% from its peak in August last year.

Meanwhile, the minimum average loan available to the self-employed fell to £ 118,800 in January.

This represents a 45% increase from its lowest point, which was in April 2020, and an increase of just over 43% in November.

Across the market as a whole, 80% of cases were affordable in January, up from 76% in December.

There was at least one lender who could meet the loan requirements of 86% of first-time home buyers and 86% of remortgage clients, while 82% of relocation cases were affordable.

Tanya Toumadj, Managing Director of Mortgage Broker Tools (MBT), said: Research.

“There is a clear warning for brokers in the data. In cases where there were no options available based on affordability, the difference between the loan requested and the maximum loan offered was 25% and this is the highest level we have experienced. in all categories since the start of the recordings.

“For brokers who are only trying one or two lenders, this can give the false impression that they won’t be able to meet the required loan amount, even though their data indicates that they will likely be able to. to do so if they are shopping.

“This is why all the research on market accessibility is essential in helping brokers achieve the best results for their clients, especially independent clients where the calculations can be more complex and varied.

“A platform like MBT Affordability can make this process quick and easy, helping brokers identify the lenders who will be best able to help their clients achieve their goals. “