House Price And Affordability Trends

FAQs

1) What Does Mortgage Affordability Mean In The UK?
Mortgage affordability is a lender assessment of whether your income and outgoings support the proposed payments now and under stressed-rate assumptions. The exact methodology varies by lender and by your circumstances.

2) Do Falling Mortgage Rates Always Push House Prices Up?
Not always. Lower rates can improve affordability and support demand, but house prices are also influenced by wage growth, employment conditions, housing supply, consumer confidence and lending criteria. Local markets can behave differently from national averages.

3) What Is Loan-To-Value And Why Does It Matter For Pricing?
Loan-to-value (LTV) is the loan amount as a percentage of the property value. Lower LTV bands often offer more product choice and better pricing, while higher LTV borrowing can come with higher rates, stricter criteria and greater sensitivity to house price changes.

4) What Is Loan-To-Income And How Does It Affect Borrowing?
Loan-to-income (LTI) is the mortgage size compared with your income. Lenders use this alongside affordability models to determine borrowing limits. Maximum borrowing varies by lender, product and applicant profile.

5) Which House Price Indices Should I Pay Attention To?
Different indices can show different results because they use different data sources and methodologies. Many borrowers look at multiple series to understand the direction of travel, while recognising that valuation for a mortgage is based on the lender’s assessment of the individual property.

6) How Much Deposit Do First-Time Buyers Usually Need?
Deposit requirements vary by lender and product, but a larger deposit can improve loan-to-value and access to product choice. High loan-to-value options can be available, subject to eligibility, affordability checks and property criteria.

7) What Is Negative Equity And Why Does It Matter More At High LTV?
Negative equity is when the mortgage balance is higher than the property value. At high loan-to-value, smaller price falls can have a bigger impact, which may reduce remortgage options and make moving more difficult. Risk is case-specific and depends on the property, market conditions and your plans.

8) Is This Page Mortgage Advice?
No. This page is for general information only and does not constitute personal or regulated financial advice. Mortgage rates, lender criteria and affordability assessments vary and can change. Your home may be repossessed if you do not keep up repayments on your mortgage.