The average mortgage loan is currently 59% of a property’s value – according to the Intermediary Mortgage Lenders Association (IMLA), the loan has fallen from 70% to loan-to-value (LTV) since 2012.
It found that an estimated £677 billion of home equity has built up in the UK housing stock, through a combination of mortgage repayments and rising property prices.
And as of 2024, around 42% of private homes will have a mortgage, meaning most properties are either directly owned or have relatively modest levels of debt.
But while existing homeowners benefit from increased equity, this power comes with high barriers to entry for first-time buyers.
IMLA’s Affordability Paradox 2025 report shows that an estimated 3.5 million potential first-time buyers, who historically would have been expected to purchase, are left out of the market. Many of them will need innovative mortgage products to enter the housing market.
Kate Davies, executive director of IMLA, said: “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 added 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.”