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Why 95% LTV lending isn’t just for first-time buyers – Askham

Why 95% LTV lending isn’t just for first-time buyers – Askham

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Posted:
June 27, 2025
Updated:
June 27, 2025

The 95% loan-to-value (LTV) conversation has long been firmly fixed on first-time buyers.

While it’s easy to see why this cohort dominates the headlines, it’s time to acknowledge a broader truth: high-LTV lending is just as vital for the thousands of homemovers facing affordability hurdles of their own. 

Thankfully, we are now operating in a fast-moving high-LTV market, where both new entrants and existing homeowners have access to lending propositions that offer greater leverage to make their next purchase a reality. 

This growing demand is reflected in lending patterns.

According to the Mortgage Lenders and Administrators Return (MLAR) data collected by the Financial Conduct Authority (FCA) for Q1 2025, residential purchase lending surged to 66.3% of all advances, up 2.6 percentage points from the previous quarter. This is the highest share recorded since Q2 2021, and a full 11.7 percentage points higher than a year earlier. 

Within this, lending to first-time buyers rose to 31.4%, climbing 1.8 percentage points from Q4 2024. Not only did this represent a substantial year-on-year rise of 5.6 percentage points, it also marked the highest level since FCA reporting began in 2007. 

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This surge in first-time buyer activity inevitably lifted demand in the higher LTV tiers. The share of mortgages at over 90% LTV rose to 6.7%, the highest level since 2008 and 1.5 percentage points above where it stood a year earlier.

A figure that highlights just how embedded high-LTV borrowing has become in today’s purchase market. 

 

High-LTV mortgages are appropriate for many borrowers 

While first-time buyers remain the most visible users of high-LTV products, they are far from the only ones.

Increasingly, homemovers – particularly those facing rising living costs, childcare expenses, or shifting between homes in a challenging economic climate – are turning to higher LTV options to maintain their housing momentum. For many, greater leverage is no longer a preference but a necessity. 

Consider a family relocating to a more expensive area for work or education, where their existing equity doesn’t stretch as far. Or a borrower using sale proceeds to repay unsecured debt, easing their monthly burden but limiting the deposit for their next home.

In both cases, the borrower is acting prudently, yet without access to higher LTV solutions, they risk being priced out of a market they already belong to. 

 

Advisers on hand to steer borrowers 

This is where intermediaries can step in and demonstrate their value by sourcing responsible and appropriate solutions. After all, 95% LTV shouldn’t be viewed as a red flag. 

It’s a practical option for many creditworthy homemovers managing today’s price-sensitive environment, where affordability concerns remain evident. 

Further evidence from Twenty7tec reinforces the market’s high-LTV momentum. In May 2025, nearly half (48.2%) of residential purchase searches were reported to be for products in the 90% LTV tier and above, while 78% were for products over 80% LTV. The message couldn’t be clearer: high-LTV mortgages aren’t a fringe offering, they’re powering a significant share of today’s purchase pipeline. 

As lenders develop more flexible and competitive 95% LTV offerings, including options for those with historical credit events or non-traditional profiles, it falls to the intermediary market to ensure these solutions reach the right customers.

By recognising the diverse demand within the high-LTV space, brokers can unlock opportunities for a wider range of buyers and help more people move up, not just onto, the UK property ladder. Especially with the right lending partner to hand who has the appetite and experience to facilitate this type of business.