The average maximum loan available to mortgage borrowers fell to a record low in January, according to the latest MBT Affordability Index.
The data shows that the average maximum loan available across the whole of the market fell to £234,224.
This represents a 12% decline year-on-year and a 14% decline from the peak recorded in September.
First-time buyers noted the greatest decline with the average maximum loan available falling to £230,555 in January, compared to 264,411 in January 2020, representing a decrease of 13%.
Furthermore, the average maximum loan offered to self-employed mortgage applicants was £221,400 in January this year, a 3% fall on the peak recorded in August.
The minimum average loan available to the self-employed also recovered to £118,800 in January.
This represents an increase of 45% on its lowest point, which was last April, and a rise of just over 43% on November.
Tanya Toumadj, chief executive at Mortgage Broker Tools, said: “One of the trends we have noted in tracking affordability over the last year is that affordability has become a key lever for lenders in controlling business volumes.
“Traditionally rate has been changed by lenders as a means of growing or tempering lending levels, but increasingly lenders are also using criteria and affordability calculations.
“Through the second half of 2020, when customer demand was high and lender service was under pressure, we saw around three to five changes to affordability calculators every week.
“The record low maximum loan amount available in January reflects this ongoing dynamic and the mounting pressure on lenders as we approach the scheduled end of the stamp duty holiday.
“However, brokers should not be disheartened when it comes to finding the right solutions for their clients.
“The latest data from Moneyfacts has reported that product choice has increased by 42% since October and is now at its highest level since prior to the first lockdown.
“Our data shows there is a suitable affordability option for 80% of all cases and so, while the average trends may be down, there are still lenders that want to, and are able to, lend the loan amount requested by most clients.
“The trick is being able to identify those lenders amidst so many changes.
“This is where a technology platform like MBT Affordability can help brokers to deliver their clients better outcomes, with instant data-driven research that identifies the best way to reach their lending objectives.”