The average loan-to-value ratio on mortgaged properties across the UK now stands at 59%, down from around 70% in 2012, according to new analysis from the Intermediary Mortgage Lenders Association.
In its latest report, The New Normal – prospects for 2026 and 2027, the trade body estimates that some £677bn of housing equity has accumulated across the UK’s housing stock since the financial crisis.
This reflects a combination of capital repayment and house price growth over more than a decade.
As of 2024, around 42% of private homes carry a mortgage, meaning the majority are either owned outright or financed with comparatively modest levels of debt.
The association argues that this structurally lower leverage has reduced borrower sensitivity to interest rate movements and contributed to a more resilient market backdrop.
CHANGING RISK PROFILE
For lenders and brokers, the figures underline how materially the risk profile of the existing homeowner base has shifted since the early 2010s.
Lower average LTVs provide a stronger equity cushion, limiting the likelihood of negative equity in the event of price corrections and offering borrowers greater flexibility when refinancing.
However, the strength of incumbent homeowners stands in contrast to the challenges facing would-be entrants.
“The market has demonstrated resilience, but we cannot ignore the access gap”
– Kate Davies, IMLA
In a separate report, Affordability Paradox 2025, the association estimated that 3.5 million potential first-time-buyers who might historically have been expected to purchase remain outside the market.
Many within this cohort, it suggests, will require innovative mortgage solutions in order to access home ownership, particularly at higher loan-to-value ratios.
Kate Davies, executive director of IMLA, said: “The market has demonstrated resilience, but we cannot ignore the access gap. There is a generation of aspiring homeowners who will need higher loan-to-value options, creative solutions and flexible products to take their first step.
“Those products already exist and innovation is continuing, but standards must remain robust. Higher-LTV lending must sit within disciplined affordability testing to ensure borrowing is sustainable over the long term.”
Davies added that improving access is not simply a question of product availability, but of awareness and guidance.
“First-time buyers need clear information about the options available to them and support in navigating an increasingly complex market.
“Professional advice plays a critical role in ensuring that those entering at higher LTV levels do so responsibly and with confidence.”
