Mortgage affordability is increasing for first-time buyers, home movers and remortgagors, according to the latest index from Mortgage Advice Bureau (MAB).
The average required income for those applying to borrow for a property purchase or remortgage have fallen by 8.13% and 8.9% respectively.
MAB, which sources its data from applications by over 900 advisers and 900 estate agents, suggests that these figures confirm that more households are now able to borrow to either buy their next property or refinance their existing home.
It says the two most probable reasons for the upturn are interest rates remaining at record lows and increased lender flexibility.
“When we look at the downwards movements in salaries, this perhaps indicates that lenders are being slightly more flexible and accommodating in terms of salary multiples,” says Brian Murphy, Head of Lending at MAB.
“2016 has again seen several new lender brands enter the market, which has triggered an even more competitive interest rate environment, meaning that every type of borrower has benefited from lower rates, particularly since the interest rate cut in August.”
“However, as there has been some upward pressure on Swaps, it’s possible that going into 2017 we may see some upward movement in terms of fixed rate pricing, but with competition intense, many lenders may be prepared to sacrifice margin to maintain volumes and market share,” he adds.