In June, the central bank announced that from August it would drop the requirement for lenders to apply a stress interest rate up to 3% when assessing prospective borrowers’ mortgage affordability.

The Financial Policy Committee (FPC) introduced the test in 2014, to ‘guard against a loosening in mortgage underwriting standards and a material increase in household indebtedness that could in turn amplify an economic downturn and so increase financial stability risks.’

But in June, the BoE said the loan to income (LTI) ‘flow limit’ measure of affordability, which limits the number of mortgages at 4.5x salary or greater borrowers can draw down, was likely to play a stronger role than the affordability test in preventing debt.

The move was generally welcomed by the mortgage industry, while others doubted that it would make any impact on the market. But some questioned the timing of the decision, as mortgage rates rise in line with the base rate and house prices remain at record highs.

Proportunity co-founder Stefan Boronea says: “While removing the mortgage affordability test is a move in the right direction, the loan-to-income limitations still make home ownership impossible for first-time buyers who are struggling due to the cost-of-living crisis and a spiralling increase in rent.

“With mortgage rates looking like they will continue to rise – therefore straining affordability even further – many people are already looking at alternative ways to finance their purchases. However, these only represent a temporary patch on a much deeper wound that everyone seems to ignore. Much more needs to be done to make homes affordable to the next generation. Innovation must continue across the mortgage industry, and much needed support must not be removed or stifled as prices continue to skyrocket and incomes fail to keep up. The ones who do not will be personally responsible for a generational catastrophe.”