The MBT Affordability Gap data from January shows that 71% of self-employed cases processed through MBT Affordability were affordable, 27% were deemed to be unaffordable, and lender were unable to lend on 2% of cases.
The average maximum loan offered to self-employed mortgage applicants was £221,400 in January this year, a fall of over 3% from its peak last August.
Meanwhile, the minimum average loan available to the self-employed recovered to £118,800 in January.
This represents an increase of 45% on its lowest point, which was April 2020, and a rise of just over 43% on November.
Looking across the whole market, 80% of cases were affordable in January which was up from 76% in December.
There was at least one lender able to meet the loan requirements of 86% of first-time buyers and 86% of remortgage customers, while 82% of home mover cases were affordable.
Tanya Toumadj, chief executive at Mortgage Broker Tools (MBT), said: “The latest MBT Affordability Gap data confirms that it is more difficult for self-employed clients to achieve their requested loan size, but that it is still possible, with the right research.
“There is a clear warning for brokers within the data. On the cases where there were no options available based on affordability, the difference between the loan requested and maximum loan offered was 25% and this is the highest level we have known in any category since records began.
“For brokers who only try one or two lenders, this can give a false impression that they will not be able to achieve the required loan amount, even though they data says they probably will be able to do so if they shop around.
“This is why whole of market affordability research is essential in helping brokers secure the best outcomes for their clients, especially self-employed clients where calculations can be more complex and more varied.
“A platform like MBT Affordability can make this process quick and easy, helping brokers to identify the lenders that will be most able to help their clients meet their objectives.”
