This Week's Insights 26/08/2019
Regional Variations and Affordability
When calculating affordability, most lenders use ONS figures to determine household expenditure costs in the background. Through asking for a region and postcode, some lenders are able to pinpoint which part of the country is relevant, since costs can vary considerably depending on where clients live, or want to buy.
But just how much difference can this make to affordability, and with which lenders? Research from recent MBT cases has shown that in fact, from our panel of 30 lenders, only 6 require either a postcode or region to be entered; so the others must be making a decision based on national figures. From those who do ask, only 3 had different figures between different regions, but the gaps were quite high.
On an average income/house price scenario, the largest range was from £198k in Greater London to £234k in the North East. As for a lower income/price/deposit case, the range was £114k in GL and £131k in the NE.
However, it seems as though Platform have it the wrong way round - they will lend less in the North East to Greater London. Rather odd! Since all of this happens behind the scenes, MBT will manage it for you, but having this insight might be useful too!
MBT Affordability Statistic of the Week…
Based on all ‘income under £25k per annum’ cases run through MBT Affordability in the last month, the top 3 lenders were:
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