The average loan-to-value (LTV) ratio on mortgaged homes across the UK has fallen to 59% – down from around 70% in 2012 – according to analysis from the Intermediary Mortgage Lenders Association (IMLA).
In its latest report, The New Normal – prospects for 2026 and 2027, IMLA estimates that £677bn of housing equity has accumulated across the UK since the financial crisis, driven by a combination of mortgage repayment and rising property values.
As of 2024, around 42% of private homes carry a mortgage, meaning the majority are owned outright or with comparatively modest levels of debt.
IMLA says lower average LTVs have reduced borrowers’ sensitivity to interest rate movements and strengthened overall market resilience.
FIRST-TIME BUYERS
However, the association said this increased resilience among existing homeowners sits alongside persistent barriers for new entrants.
Its Affordability Paradox 2025 report estimates that around 3.5 million potential first-time buyers who might historically have been expected to purchase remain outside the market.
CREATIVE SOLUTIONS
Kate Davies (main picture, inset), Executive Director of IMLA, says: “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.”
CLEAR INFORMATION
Davies adds: “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.”
