The average Loan-to-Value (LTV) ratio of mortgaged homes in Britain has fallen to 59%, down from around 70% in 2012, the Intermediary Mortgage Lenders Association has revealed.
IMLA’s report The New Normal – prospects for 2026 and 2027 shows that an estimated £677 billion of home equity has built up in the UK housing stock since the financial crisis, through a combination of mortgage repayments and rising property values.
As of 2024, around 42% of private homes will have a mortgage, meaning most properties will be owned outright or have relatively modest levels of debt.
IMLA says lower average LTVs have reduced the sensitivity of many borrowers to interest rate movements and strengthened the overall resilience of the market.
However, the association notes that this strength among existing homeowners comes with significant barriers to entry.
IMLA’s Affordability Paradox 2025 report shows that an estimated 3.5 million potential first-time buyers, who were historically expected to buy, are left out of the market, many of whom will need innovative mortgage products to get on the housing ladder.
IMLA executive director Kate Davies says: “The market has shown 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.”
“These products already exist and innovation continues, but standards must remain robust. Higher LTV loans must fall within disciplined affordability tests to ensure lending is sustainable in the long term.”
Davies adds that improving access is not just a matter of product availability, but of awareness and guidance.
“Start-ups need clear information about the options available and support in navigating an increasingly complex market. Professional advice plays a crucial role in ensuring that those entering at higher LTV levels do so responsibly and with confidence.”