The share of UK mortgage advances made at loan-to-value ratios above 90% reached its highest level in 18 years during the second quarter of 2026.
New statistics published by the Financial Conduct Authority show that these higher loan-to-value mortgages represented 8.4% of gross advances, up 0.4 percentage points from the previous quarter.
That was the highest proportion since the second quarter of 2008 and 1.4 percentage points higher than a year earlier.
Verified facts
The outstanding value of residential mortgage loans increased by 0.8% during the quarter to £1,760.6 billion. This was 3.1% higher than a year earlier.
Gross mortgage advances increased by 11.1% from the first quarter to £77.4 billion. They were 31.7% higher than in the corresponding quarter of 2025.
New mortgage commitments, representing lending agreed for the coming months, increased by 1.4% to £79.2 billion. This was 1.3% higher than a year earlier.
The proportion of lending classed by the FCA as high loan-to-income increased by 0.9 percentage points to 46.0%. It was 4.6 percentage points higher than a year earlier.
The share of advances exceeding 75% loan-to-value rose to 47.5%, the highest proportion since the fourth quarter of 2007.
What happened to mortgage arrears?
The value of outstanding mortgage balances in arrears fell by 1.9% during the quarter to £19.7 billion.
This was the lowest value since the third quarter of 2023 and 7.3% below the level recorded a year earlier.
Arrears remained equivalent to 1.1% of all outstanding mortgage balances. The number of new possessions fell by 7.1% from the previous quarter to 2,058.
The FCA defines arrears for this dataset as missed contractual payments where the balance owed is at least 1.5% of the outstanding mortgage balance, or where the property is in possession.
The Apolifina view
The figures point to stronger mortgage activity and greater use of higher loan-to-value lending.
This may indicate improved mortgage access for buyers with smaller deposits. It also means a growing share of new lending begins with a thinner equity cushion.
Higher loan-to-value borrowers can be more exposed if property prices fall, particularly if they need to sell or refinance before building additional equity. That does not mean every high loan-to-value mortgage is inappropriate or likely to default.
The simultaneous decline in balances with arrears provides an important counterweight. The data does not presently show that the increase in higher loan-to-value lending has produced a corresponding rise in mortgage distress.
What remains uncertain
The statistics describe lending completed during the second quarter. They do not show how individual borrowers' affordability was assessed or how their circumstances may change.
Loan-to-value ratios are only one measure of mortgage risk. Income stability, repayment structure, interest rates, credit history and household expenditure also matter.
The effects of the latest lending will become clearer only over time, particularly when borrowers refinance or encounter changes in interest rates, employment or property values.
The figures are not seasonally adjusted, so comparisons between quarters may partly reflect normal changes in housing-market activity.
Primary sources
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