A single data point rarely tells the full story, but the latest mortgage lending figures from the Financial Conduct Authority (FCA) tell a consistent one. The share of gross mortgage advances with a loan-to-value (LTV) ratio - the proportion of the property price covered by borrowing - above 90% reached 8.3% in Q4 2025, according to FCA mortgage lending statistics. That is the highest level since 2008 Q2, and 2.1 percentage points higher than a year earlier. The trend is not a blip. It has climbed steadily from 6.7% in Q1 2025 through to that Q4 peak.

First-time buyers are the primary force behind that shift. Lending to first-time buyers hit 31.4% of all house purchase advances for owner-occupiers in Q1 2025, the highest share since FCA reporting began in 2007, according to the same FCA data. With smaller deposits and limited equity to draw on, this group is structurally more reliant on high-LTV products than any other buyer segment.

The Rate Environment Making It Harder

The Bank of England base rate currently sits at 3.75%, its lowest since spring 2023, following four cuts in 2025. The direction of travel looks promising on paper. The underlying picture, however, is messier.

Swap rates - the wholesale funding costs lenders use to price fixed-rate mortgages - remain sensitive to global events. In early 2026, lenders pulled hundreds of mortgage products within 48 hours and replaced them with higher-rate alternatives as oil price volatility and shifting inflation expectations hit market sentiment, according to Property Wire reporting. That kind of repricing hits first-time buyers hardest. They have less negotiating power, smaller buffers, and fewer options if a product is withdrawn mid-application.

The data shows that in December 2025, 44% of first-time buyers chose mortgages at 85-90% LTV, up from 41% the year before, according to HomeOwners Alliance figures. Year-on-year, the direction is clear: more first-time buyers are borrowing more, relative to the value of the property they are buying.

What the Numbers Mean for Buyers in 2026

The gap between first-time buyer exposure and the rest of the market is widening. First-time buyers at 90-95% LTV have virtually none of that cushion.

The FCA's Q4 2025 figures also show that 46.9% of all gross mortgage advances now carry an LTV above 75% - the highest share since 2007 Q4, and 2.9 percentage points higher than a year earlier. Compared to the pre-2008 era, the market is running on thinner equity margins across the board.

For first-time buyers, the combination of high LTV dependency and an unpredictable rate environment means the cost of getting on the ladder is increasingly shaped by forces outside their control.

What This Means for First-Time Buyer Strategy

Product count matters less than product cost. With over 980 deals available at 90% LTV - the highest number on record in 2026, according to HomeOwners Alliance data - lender appetite is still there. The average 5-year fixed rate at 75% LTV has dropped to 4%, the lowest since 2022. The equivalent rate at 90% LTV remains notably higher, widening the cost gap between buyers with and without larger deposits.

For anyone planning a first purchase, two factors are worth tracking. The first is whether swap rates - which drive fixed mortgage pricing - shift further on the back of inflation data or global events. The second is whether the Bank of England's cutting cycle continues at its current pace. A cut at the June 2026 meeting would likely ease fixed-rate pricing at lower LTV tiers first, with high-LTV products slower to respond.