The proportion of new mortgages being taken out above 90% loan-to-value has reached its highest level in 18 years as lenders increasingly support buyers with smaller deposits.
Latest mortgage lending figures show 8.4% of gross advances were at LTVs exceeding 90% during the second quarter of 2026, up from 8% in the previous quarter and 7% a year earlier.
It is the highest proportion recorded since the second quarter of 2008, according to the latest Mortgage Lenders and Administrators Return (MLAR).
Higher-LTV lending more broadly is also increasing. Some 47.5% of gross mortgage advances were above 75% LTV, up 1.5 percentage points quarterly and 4.2 percentage points annually to reach the highest share since the final quarter of 2007.
LENDING JUMPS
The figures also point to a significant increase in overall mortgage activity.
Gross mortgage advances reached £77.4bn during the second quarter, 11.1% higher than the previous three months and 31.7% above the same period last year.
New mortgage commitments, representing lending agreed for the coming months, increased by 1.4% quarterly and 1.3% annually to £79.2bn.
Outstanding residential mortgage lending now stands at £1.76trn, 3.1% higher than a year ago.
Remortgaging is taking a growing share of the market, accounting for 31.2% of owner-occupier gross advances. This is the highest proportion since the first quarter of 2024.
Meanwhile, owner-occupier house purchase accounts for 56.1% of advances, including 27.3% to first-time buyers and 28.8% to home movers.
ARREARS FALL
There are also signs of improvement among existing borrowers experiencing financial difficulties.
The value of outstanding mortgage balances in arrears fell 1.9% during the quarter to £19.7bn – its lowest level since the third quarter of 2023.
Arrears balances are now 7.3% lower than a year earlier, while the proportion of all outstanding mortgage balances in arrears remains at 1.1%.
New possessions also fell, declining 7.1% during the quarter and 15.6% annually to 2,058.
LOW-DEPOSIT BORROWING
Rachel Springall, Finance Expert at Moneyfactscompare.co.uk, says: “The rise in the proportion of mortgages above 90% loan-to-value has reached its highest level in 18 years, showing just how vital low-deposit borrowing has become in the housing market.
“Saving a large deposit is a daunting task for many borrowers, so it is essential that lenders continue to adjust their affordability criteria fairly and create innovative products to help borrowers.
“Those who do borrow at the highest ends of the loan-to-value spectrum must be warned about the dangers of negative equity if house prices plummet, so seeking good advice and making efforts to overpay a mortgage is a wise choice.”
AFFORDABILITY FOCUS
Nathan Emerson, CEO of Propertymark, says: “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.”
