Mortgage affordability worsened for the second month in a row in January, the latest index from mortgage and protection network Stonebridge has found.

Borrowers spent more of their salary on monthly repayments in both December and January than in previous months, the firm’s analysis revealed.

In December, mortgage repayments accounted for 36.5% of the average borrower’s salary, up from 36.3% in November.

January saw a further increase in this figure to 37%.

Weakening affordability is being driven by a combination of increasing loan sizes, slow wage growth and higher mortgage rates.

The average loan size grew by 1.4% to £192,114 in January, while the average annual salary rose by 0.5% between December and January, according to the Office for National Statistics.

Bank of England figures show the average rate on new mortgages increased for the first time in five months, climbing 4 basis points to 4.51%.

However, affordability is still significantly better than it was in December 2023, when mortgage repayments accounted for 42.4% of the average salary.

The long-running average is 35.9%.

Stonebridge chief executive Rob Clifford says: “Mortgage affordability has continued to be tight for the second consecutive month as rising house prices push loan sizes higher and mortgage rates edged up.

“But in context, remember that affordability remains significantly better than at the start of last year, and affordability will definitely improve as rates fall in coming months.

“While the Bank of England’s Monetary Policy Committee opted to hold rates in May, there are mounting calls for it to reduce borrowing costs further.

“Inflation remains a concern, but much of the recent increase is imported, driven by rising energy costs and a strong dollar rather than by surging domestic demand.

“As a result, the risk of inflation spiralling out of control again appears limited.

“At the same time, the UK economy is struggling for momentum.

“If growth continues to stall, the MPC may have little choice but to step in to provide support.

“That could lead to lower borrowing costs in the months ahead, offering much-needed relief to mortgage borrowers, who are still grappling with the impact of the cost-of-living crisis.”