Drop in average LTV reported

March 2, 2026 by Brendan O'Neill

Home owners

A new report has found that the average loan-to-value (LTV) for mortgages has dropped, which puts homeowners in a stronger position.

This report was published by the Intermediary Mortgage Lenders Association (IMLA) and it shows an average LTV ratio of 59%. By comparison, back in 2012 the average LTV ratio stood at 70%. What this indicates is that there are more property owners in the UK who have significant equity in their homes. IMLA has estimated that the total UK housing equity is now in the region of £677 billion – much of which has been built up since the financial crisis of 2008.

That equity build-up is down to a combination of house price rises and repayment of capital loans. The number of homes that are currently mortgaged is just 42%, leaving the majority either owned outright or with fairly low borrowing against them.

All of this is good news for homeowners, because it means they are much less vulnerable to volatile interest rates. However, the situation is less rosy for people keen to get onto the property ladder.

They are faced with a situation where they are liable to need mortgages with higher LTVs at a time when there are fewer such products available.

IMLA executive director Kate Davies said to Mortgage Introducer that:

“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.”

A mortgage advisor with the CeMAP qualification can help to identify such products.