This is the highest level since the collapse of Lehman Brothers when it hit 49.4% in December 2008.
According to e.surv, the rise in LTV was driven by people buying homes over £500,000, who were offered an additional 2.8% of the value of their property in December compared to November.
Richard Sexton, business development director of e.surv, said: “There is no doubt lenders are being selective with their limited funds, growing their business by supporting wealthier customers and offering them ever more generous terms.”
Sexton added that for the long-term health of the housing market, borrowers and lenders would need to make sure borrowers with smaller deposits are not neglected.
He said: “Lenders recognise this and more recently there are signs of improvement for lower value borrowers who will provide the next generation of those trading up in the market.”
Meanwhile, the volume of mortgages approved for house purchase dipped to 47,000 last month, a fall of 0.5% compared to November.
Sexton added: “December’s mortgage market contended with impossible weather conditions, and a strong November, but was relatively resilient with only a small decline in volumes, and a big improvement in the loan-to-value ratios offered by lenders.”
Despite LTV ratios hitting a two-year high, the level still remains below the peak of over 69% in 2006.
