Mortgage affordability improved for the second consecutive month in November, according to analysis from Stonebridge.

The mortgage and protection network’s latest Mortgage Affordability Index shows that monthly repayments accounted for 36.3% of the average borrower’s salary in November.

This is down significantly from 40% in September and 38.7% in October, the data shows.

The last time mortgages were this affordable in relation to earnings was in November 2022, when repayments accounted for 34% of the average borrower’s salary.

Falling mortgage rates, rising wages, and smaller loan sizes are identified as several reasons for the improvement.

The average rate on newly drawn mortgages fell from 4.61% to 4.5% between October and November, according to the Bank of England, while Office for National Statistics data shows wages edged up over the same period.

Stonebridge’s internal data also shows borrowers’ average loan size dipped 4.7% in November, easing the strain on borrowers even further.

Commenting on the latest figures Stonebridge chief executive Rob Clifford said: “Mortgage affordability improved for the second month in a row in November, offering some much-needed breathing room for borrowers buying or refinancing.

“While rising funding costs have pushed up fixed-rate mortgages since the start of the year, there’s no need for borrowers to panic. There are still plenty of great deals available and borrowing costs remain well below the level they were for much of last year.

He added: “Looking ahead, the outlook looks very encouraging. Markets are predicting up to three rate cuts this year, while the Bank of England governor recently hinted at as many as four reductions in 2025.

“The extent to which the central bank cuts rates will be determined by the path of inflation, of course, but the signs suggest that mortgage costs should reduce throughout 2025, which will provide further relief to borrowers.”