Mortgage Broker Tools assessed loan enquiries placed by intermediaries between January and August. The platform found that the percentage of enquiries considered to be affordable has dropped from 80 per cent to 73 per cent over the eight month period.
During this time, average house prices have risen by £11,000, or 4.4 per cent, from £251,832 to £262,954.
In more than 20 per cent of the cases that failed affordability checks, the loan amount was around five per cent outside of criteria.
House prices have risen by seven per cent in the last 12 months fuelled by the stamp duty holiday and pent up demand to move home after Brexit uncertainty ended and lockdown restrictions were lifted.
Economists say that due to a lack of supply of homes to buy and predictions that interest rates will fall even further, house price inflation is likely to be sustained. Capital Economics has forecast that the average mortgage interest rate will fall to 1.6 per cent from 1.85 per cent by the end of the year and house price growth for 2022 will be five per cent.
Tanya Toumadj, chief executive at Mortgage Broker Tools, said: “The strength of the property market over the course of 2021 has been well documented and it has naturally made it harder for buyers to afford a home of their choosing as they have needed to stretch their borrowing further to keep up with rising prices.
“However, buyers and brokers shouldn’t lose hope. Our data also shows more than a fifth of these cases that are considered unaffordable are less than five per cent away from there being a suitable affordable option. So, there are opportunities for many borrowers to secure the loan they need, as long as they work with the best lender for their circumstances.”