- 12 March 2021
- Posted by: mikey0809
- Categories: Mortgage, Property
First-time buyer affordability has improved in February as the average maximum loan available increased to £237,500 from a record low of £230,555 in January, according to an index by Mortgage Broker Tools.
The figures still remain nearly 8% lower than a year ago when the average maximum loan available was £256,915.
At least one lender was available and able to meet the loan requirements of 86% of first-time buyers in February this year, which is the highest figure on record.
Only 71% of first-time buyers in February 2020 had at least one lender able to meet their required borrowing and in May last year it was just 59%.
Tanya Toumadj chief executive of MBT says: “First-time buyers have had reason to be cheerful in recent weeks and the launch of the mortgage guarantee scheme will open up new options for potential buyers who have only a small deposit.
“However, it’s important to remember that any buyers hoping to borrow 95% LTV under the scheme will need to demonstrate that they can afford the loan and so the state of the affordability landscape will play a big role in the success of the initiative.
“This is something that we will be monitoring closely with the MBT Affordability Index over the coming months.
“The good news is that the average maximum loan sizes available to first-time buyers bounced back in February, from their record low in January.
“It is still harder for borrowers to access larger loan sizes than it was this time last year but, with more lenders focusing on this space, there are more options for those hopeful to take a first step onto the property ladder.”