A loosening of mortgage lending rules has seen the number of mortgage advances with loan-to-value (LTV) ratios exceeding 90% increase to the highest levels since 2008, according to the latest Mortgage Lenders and Administrators Statistics from the Bank of England.
Mortgages above 75% have increased to their highest share since 2007, at 47.5% of total advances.
The Bank of England’s statistics, covering the second quarter of 2026, also reveal the second highest level of new mortgage commitments since the third quarter of 2022 and the fourth highest advances since the end of that year. The value of gross mortgage advances increased by 11.1% from the previous quarter to £77.4 billion – 31.7% higher than a year earlier.
The value of new mortgage commitments increased by 1.4% from the previous quarter to £79.2 billion, 1.3% higher than the previous year.
The latest figures follow a loosening of lending rules by the Financial Conduct Authority last year, in a bid to encourage lenders to widen borrowing options and ease affordability pressures.
Rob Clifford, chief executive of Stonebridge mortgage and protection network, said the statistics suggest “huge momentum” remains present in the mortgage market, although he acknowledged the figures “jump around, distorted as they are by occasional interventions and events”.
He added: “Since the turn of this decade, there’s been a pandemic, a period of soaring inflation and two stamp duty cliff edges, most recently last year.
“It’s that last factor that complicates this report, because approvals surged and advances slumped after the stamp duty changes in April last year. This masks the true picture but, if we take a step back, both commitments and advances still look strong compared with long-run averages.
“The second quarter of 2026 actually witnessed the second highest level of new mortgage commitments since Q3 2022, and the fourth highest advances since the end of that year. So there remains huge momentum in the mortgage market and we remain very confident that our business and the sector will deliver the 2026 results we predicted at the start of this year.
“Lloyds reported this week that house prices are falling but that’s been the case in real terms for some time, and yet the mortgage market has remained busy. Markets do sometimes have to adjust but house prices, mortgage volumes and transaction volumes aren’t the same thing.”
Rachel Springall, finance expert at Moneyfacts, said the proportion of lending at 90%+ LTV ratios is indicative of “how vital low-deposit borrowing has become in the housing market”, adding: “Saving a large deposit is a daunting task for many borrowers so it is essential that lenders continue to adjust their affordability criteria fairly and create innovative products to help borrowers.”
Propertymark CEO Nathan Emmerson said: “When looking at the year to date, we have seen a myriad of complications within the economy that were largely unexpected at the very start of the year. From a consumer viewpoint, affordability has rightly been in sharp focus; however, it is extremely welcome news to see the value of gross mortgage advances increase during the second quarter of 2026.
“Overall, the housing market has remained largely resilient across most regions. As we head into autumn, we hope to see greater stability and growth return to the UK housing market, with the next Bank of England base rate decision and the autumn budget likely to influence market sentiment in the weeks ahead.”
