The average loan-to-value (LTV) ratio on mortgaged homes across the UK has fallen to 59%, new analysis from the Intermediary Mortgage Lenders Association (IMLA) has revealed.

The figure is down around 70% in 2012 which the trade body said highlights the structurally lower leverage of today’s housing market.

According to IMLA’s new report, The New Normal – prospects for 2026 and 2027, since the financial crisis an estimated £677bn of housing equity has built up across the UK housing stock, through a combination of mortgage repayment and rising property values.

As of 2024, around 42% of private homes carry a mortgage, meaning most properties are owned outright or with relatively modest levels of debt.

IMLA said that lower average LTVs have reduced the sensitivity of many borrowers to interest rate movements and strengthened overall market resilience.

However, the trade association also warned that this strength among existing homeowners sits alongside substantial barriers to entry.

IMLA’s Affordability Paradox 2025 report revealed that an estimated 3.5 million potential first-time buyers, who might historically have been expected to purchase, remain outside the market, many of whom could require more innovative mortgage products to get onto the housing ladder.

Executive director of IMLA, Kate Davies, said: “The market has demonstrated resilience, but we cannot ignore the access gap. There is a generation of aspiring homeowners who will need higher LTV 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.”

Davies also suggested that improving access is a question of awareness and guidance, as well as product availability.

“First-time buyers need clear information about the options available to them and support in navigating an increasingly complex market,” she added. “Professional advice plays a critical role in ensuring that those entering at higher LTV levels do so responsibly and with confidence.”

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