Gross mortgage advances rose by 11.1% in the second quarter of 2026, while the proportion of lending above 90% LTV reached its highest level since 2008, according to new regulatory data.

The latest Mortgage Lenders and Administrators Statistics showed gross advances increased to £77.4 billion during the quarter, 31.7% higher than a year earlier.

The figures, published on 8 September, are based on Mortgage Lenders and Administrators Return data supplied by around 340 regulated mortgage lenders and administrators.

The outstanding value of residential mortgage loans increased by 0.8% from the first quarter to £1,760.6 billion. This was 3.1% higher than in the same period last year.

New mortgage commitments, representing lending agreed to be advanced in the coming months, increased by 1.4% during the quarter to £79.2 billion and were 1.3% above their level a year earlier.

HIGH-LTV LENDING GROWS

The proportion of gross mortgage advances made at LTV ratios above 90% increased by 0.4 percentage points during the quarter to 8.4%.

This was the highest proportion recorded since the second quarter of 2008 and was 1.4 percentage points higher than a year earlier.

Meanwhile, 94.5% of gross advances were made at interest rates less than two percentage points above Bank Rate. This was down by 0.2 percentage points from the previous quarter and represented the lowest share since the first quarter of 2023.

REMORTGAGING TAKES LARGER SHARE

Owner-occupier remortgaging accounted for 31.2% of gross mortgage advances, up by 3.1 percentage points from the previous quarter and 2.2 percentage points year on year. It was the highest proportion since the first quarter of 2024.

By contrast, the proportion of advances for owner-occupied house purchases fell by 1.6 percentage points to 56.1%, although it remained 0.1 percentage points above its level a year earlier.

Buy-to-let’s share of gross advances fell by 0.9 percentage points during the quarter to 8.0%, its lowest level since the third quarter of 2024. The proportion was 1.2 percentage points lower than a year earlier.

MORTGAGE ARREARS FALL

The value of outstanding mortgage balances in arrears declined by 1.9% during the quarter to £19.7 billion, the lowest level since the third quarter of 2023.

Balances in arrears were 7.3% lower than a year earlier, while their share of all outstanding mortgage balances remained unchanged during the quarter at 1.1%. This was 0.1 percentage points lower year on year.

INDUSTRY REACTION

Rob Clifford, CEO of Stonebridge mortgage and protection network, said: “These figures do jump around, distorted as they are by occasional interventions and events.

“Since the turn of this decade, there’s been a pandemic, a period of soaring inflation and two stamp duty cliff edges, most recently last year.

“It’s that last factor that complicates this report, because approvals surged and advances slumped after the stamp duty changes in April last year. This masks the true picture but, if we take a step back, both commitments and advances still look strong compared with long-run averages.

“The second quarter of 2026 actually witnessed the second highest level of new mortgage commitments since Q3 2022, and the fourth highest advances since the end of that year. So there remains huge momentum in the mortgage market and we remain very confident that our business and the sector will deliver the 2026 results we predicted at the start of this year.

“Lloyds reported this week that house prices are falling but that’s been the case in real terms for some time, and yet the mortgage market has remained busy. Markets do sometimes have to adjust but house prices, mortgage volumes and transaction volumes aren’t the same thing.”

VARIED CUSTOMER NEEDS

Richard Pike, sales and marketing director at Phoebus Software, said: “The latest MLAR figures show just how difficult it has been for the mortgage market to find a clear direction this year.

“There are certainly signs of market resilience with new mortgage commitments rising, however, uncertainty around the economic outlook and the path for interest rates continues to weigh on borrowers and lenders alike.

“While gross mortgage advances rose 11.1% during the quarter, new commitments only rose 1.4%, showing the market isn’t generating a huge amount of new business.

“Much of the increase in advances is being driven by remortgage activity as borrowers reach the end of fixed-rate deals. This shows how remortgaging remains a vital part of activity.

“Arrears point towards the underlying resilience of borrowers.”

“Encouragingly, arrears continue to point towards the underlying resilience of borrowers. While affordability remains a concern, most households continue to meet their repayment commitments, suggesting that the pressures facing the market have not been translated into widespread financial distress.

“Possessions paint a similar picture, albeit with a sharper decrease in numbers. This should also be reassuring that households are continuing to meet commitments amidst ongoing uncertainty and financial difficulties.

“Looking ahead, the key challenge for lenders will be managing a market where customer needs are becoming increasingly varied. Some borrowers will be looking for greater flexibility as they refinance, while others will need additional support as pressures around affordability persist.

“Lenders that can combine effective servicing with the ability to adapt products and processes to changing customer circumstances will be best placed to navigate the next phase of the market.”

AFFORDABILITY FOCUS

Nathan Emerson, chief executive of Propertymark, said: “When looking at the year to date, we have seen a myriad of complications within the economy that were largely unexpected at the very start of the year.

“From a consumer viewpoint, affordability has rightly been in sharp focus; however, it is extremely welcome news to see the value of gross mortgage advances increase during the second quarter of 2026.

“Overall, the housing market has remained largely resilient across most regions. As we head into autumn, we hope to see greater stability and growth return to the UK housing market, with the next Bank of England base rate decision and the Autumn Budget likely to influence market sentiment in the weeks ahead.”