To measure affordability changes this year, MBT took the average loan size offered in January, which was £215,002, and gave it an index score of 1.
The analysis showed the index score for maximum loan offered to first-time buyers dropped from 1.22 in April to 1.2 in August.
However, MBT found the average minimum loan size offered to this segment of the market rose from a score of 0.34 in April to 0.53 in August. This means first-time buyers can borrow a minimum £113,950 compared to £73,100 five months ago.
Homemovers are the only group of clients requesting larger loan amounts since lockdown compared to the beginning of the year, suggesting a surge in activity since the Stamp Duty holiday was announced in July.
The average loan amount requested in July was £225,752, five per cent higher than the average amount of £215,002 requested in January.
Affordability for remortgagers has remained consistent throughout the year with maximum loan sizes at an index score of about 1.4, or £301,002. Minimum loans sizes offered to homemovers average £129,000.
Maximum loans offered to those remortgaging peaked in March during lockdown, however, scoring at 1.55 and representing a loan of £333,252.
This data has been released along with the launch of MBT’s affordability index which gives brokers an updated snapshot of affordability calculations and loan sizes.
Overall, the analysis revealed lenders tightened affordability calculations in April, but have slowly opened back up since May to lend more to customers.
Based on 65,000 searches, it found the average loan requested by brokers across the whole of market in August was £210,000. The average minimum loan amount offered by lenders was £127,965 and the maximum £284,880.
Tanya Toumadj, CEO at Mortgage Broker Tools, said affordability was an important part of placing a case so the company wanted to help brokers understand the likely borrowing potential for their customers.
She said: “The MBT Affordability Index is a quick and easy way for brokers to see whether lenders are increasing the loan amounts they are prepared to offer or restricting loan sizes. It also gives brokers an idea of the spread of loan sizes available to borrowers.
“This is often significant and represents a real opportunity for brokers to add value by selecting the right lender able to offer a loan amount that meets their client’s objectives. This takes a lot of research, of course, and is why a platform like MBT Affordability is so important for brokers to have in their armoury,” Toumadj said.
