Mortgage affordability on the rise according to new report

Data from the Mortgage Advice Bureau has shown that average incomes for those applying to borrow for a home purchase or a remortgage have fallen annually by 8.13% and 8.9% respectively, creating an environment of more flexibility amongst lenders.

Related topics:  Finance
Warren Lewis
27th January 2017
approved
"Mortgage rates are lower than they were 12 months ago, therefore affordability has improved"

MAB says some easing of criteria and improved affordability assessments has resulted in potentially more borrowers getting access to mortgage finance.

However, as there has been some upward pressure on swaps, there may be some upward movement in terms of fixed rate pricing going into 2017.

But with competition intense, MAB believes many lenders may be prepared to sacrifice margin to maintain volumes and market share.

Buy-to-let purchase prices are expected to see a downwards movement both month on month and year on year, as lenders applied the latest PRA rental stress test calculations in December. This led to some landlords being priced out of the more expensive areas due to not being able to meet income coverage ratio criteria.

Brian Murphy, Head of Lending for Mortgage Advice Bureau commented: “When we look at the downwards movements in salaries, e.g. for first time buyers, remortgage and home mover purchases, this perhaps indicates that lenders are being slightly more flexible and accommodating in terms of salary multiples. Mortgage rates are lower than they were 12 months ago, therefore affordability has improved, meaning that salaries don’t need to be as high as they were a year ago in order to borrow the amounts required by consumers, and this may be reflected in the slight downwards movements in average salaries."

More like this
Latest from Financial Reporter
Latest from Protection Reporter
CLOSE
Subscribe
to our newsletter

Join a community of over 20,000 landlords and property specialists and keep up-to-date with industry news and upcoming events via our newsletter.