Mortgage finance is at its most affordable level for nearly three years, new analysis by Stonebridge shows.

The network’s latest Mortgage Affordability Index shows the average borrower’s mortgage accounted for 34.3% of their salary in September – the lowest proportion since November 2022.

This is down from 34.6% in August and 40% a year earlier, the research found.

Falling mortgage rates, which are down 57 basis points to an average of 4.19% over the past 12 months, are the main reason for the improvement in affordability.

However, average wages have risen by 4.75% in the year to September, which has also boosted affordability. 

Stonebridge combines official wage and mortgage statistics with its own loan data to produce the index.

Chief executive Rob Clifford says: “Mortgage affordability has improved significantly over the past year, reaching its most favourable level since late 2022.

“Falling mortgage rates, alongside rising wages, mean borrowers are spending a smaller share of their income on housing — a welcome relief for first-time buyers and those looking to move. 

“Looking ahead, the Bank of England is expected to cut rates in December.

“While fixed-rate mortgages are priced off swaps rather than the base rate, a lower-rate environment could encourage lenders to bring more competitive deals to market. 

“This suggests affordability could continue to improve into 2026, provided house prices don’t rise unexpectedly.”