The number of affordable options for First Time Buyers fell by 40% in 2023, according to the Pepper Money Specialist Lending Study. The study found that 84% of all respondents say the current economic environment will make it harder for them to get a mortgage.

Similarly, according to the Mortgage Broker Tools (MBT) Affordability Report 2023, nearly 9 in 10 brokers (89%) said they have to work harder to secure the loan size their clients want as a result of the cost-of-living crisis. This is because they now have to look at a wider set of lenders to find the right fit.

MBT says that, based on a number of typical customer profiles, the number of affordable options for First Time Buyers borrowing 90% LTV decreased by 40% in 2023, and the number of affordable options for customers borrowing at high loan-to-income fell by 27%.

MBT chief executive Tanya Toumadj commented: “Continued high inflation is still causing pressure on household budgets. However, this hasn’t ultimately had a real impact on borrowers being able to secure the loan size they want as the percentage of cases where there’s at least one lender able to provide the loan required remains stable at around 75%.

“However, what has changed is the range of options, with the average difference between the highest loan offered and lowest loan offered for the same customer increasing from £127k to £145k.”

Pepper Money business development director Ryan Brailsford said: “It’s always interesting to analyse the results of our customer research against broker trends, and it’s clear that affordability is a key issue as household budgets continue to be squeezed. “Our Specialist Lending Study found that some customers are considering downsizing to reduce their outgoings, whilst others have taken on additional employment to earn more income.”