According to an analysis from Stonebridge, this is a drop from 37% in January and February and compares to 38.1% in March 2024.
The report said mortgage finance was the “most affordable” since December last year, when mortgage repayments made up around 36.5%. The long-running average is estimated at 35.9%.
Stonebridge attributed the improvement in the average borrower’s salary to a “slight uptick in wages and a marginal reduction in mortgage rates”.
The average consumer borrowed around £194,372 in March, the highest amount since October last year and a rise of 0.8% on the prior month.
Average wages increased 0.5% on the prior month, according to Office for National Statistics (ONS) data, while the average mortgage rate decreased from 4.53% to 4.5%, based on Bank of England data.
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Rob Clifford, chief executive of Stonebridge, commented: “Mortgage affordability improved slightly in March, but after a turbulent three years, even such modest progress matters. Our affordability index shows that stability is returning to the market, and with it, an appropriate sense of confidence. That shift in sentiment is just as important as the headline numbers.
“The good news is that the outlook for borrowers looks increasingly positive. The Bank of England’s recent rate cut — and that further cuts are very likely — has given lenders the confidence to reduce pricing even further. Several high street banks have launched sub-4% mortgage deals, and competition is increasing across the market and delivering consumer benefits.
“We’re still some way from a fully fledged recovery in market activity, but momentum is clearly building. For brokers, any positive pricing and market news is always an opportunity to engage with existing customers and continue to strengthen that relationship – and deliver even better consumer outcomes.”
