Mortgage lending hits record high while homeownership stalls

5 October 2026 - Outstanding bank lending against mortgages stood at a record £1.55 trillion as of August, accounting for more than half of all bank lending, according to new analysis from research and campaign group Positive Money.

Whilst it may be tempting to assume that greater mortgage lending must have translated into greater levels of homeownership, data from the government’s English Housing Survey shows that the homeownership rate has fallen from 70.9% in 2003 to 64.8% in 2024-25, despite Positive Money’s analysis showing that outstanding mortgage credit has more than tripled in that time.

This is partly because most new lending is going to homeowners already on the property ladder or to landlords, rather than to first-time buyers. This is supported by data from the FCA, which shows that only around 3 in 10 pounds of new mortgage lending has gone to first-time buyers in recent years. 

However, even lending that is targeted to help first-time buyers can have the effect of pushing up house prices and therefore making homeownership even more difficult for prospective first-time buyers, as shown by the impacts of the Help to Buy scheme. Although the details of Andy Burnham’s Your First Home (YFH) scheme are yet to be announced, Positive Money cautions against policies focused on increasing the amount of debt prospective buyers can take on, rather than tackling the root causes of unaffordability. Instead of expanding mortgage credit further, the think tank says policy must protect households dependent on renting while reducing credit-driven house price inflation.

Alec Haglund, Senior Researcher at Positive Money, said: 

“Far from helping prospective first-time buyers out of the private rented sector and into homeownership, the disproportionate and growing share of mortgage lending has contributed to pulling the housing ladder out of reach by pushing up house prices, benefitting existing owners and landlords.” 

“Policies based on further mortgage credit expansion - such as that currently being proposed in Burnham’s Your First Home scheme - won’t solve the root causes of the affordability crisis facing renters and prospective first-time buyers. 

“What we need is a coordinated approach to housing and credit policy which regulates rents and disincentives the treatment of homes as vehicles for accumulating and extracting wealth, turning our houses back into homes rather than financial assets.”

Positive Money recommends that:

1. The Bank of England’s Financial Policy Committee (FPC) - which is supposed to protect the financial stability of our economy - alter the rules that govern Buy-To-Let (BTL) lending, to dampen demand from landlords, with the aim of reducing investor-driven house price inflation.

2. Rent controls are introduced to improve affordability for people dependent on the private rented sector.

3. The Bank of England to use the tools at its disposal to steer lending away from being so heavily concentrated towards existing property (which is pushing up prices) and instead towards productive activities (like the construction of new housing, preferably social).

4. Reduce our dependence on shareholder-owned banks (e.g. HSBC) and increase the presence of stakeholder-owned banks (e.g. building societies), which tend to invest more in things like social housing (something we will need more of as we shrink the size of the private rented sector).

Notes:

• Positive Money’s full briefing can be found here: https://www.datocms-assets.com/132494/1790866221-final-bank-lending-and-the-housing-system.pdf 

• The live table named “FT1101 (S101): trends in nature” in the English Housing Survey data on tenure trends and cross tenure shows changes in homeownership over time: https://www.gov.uk/government/statistical-data-sets/tenure-trends-and-cross-tenure-analysis  

• Chart 5 in the FCA’s mortgage lending statistics for Q2 2026 shows that only around 3 in 10 pounds of new mortgage lending has gone to first-time buyers in recent years: https://www.fca.org.uk/data/commentary-mortgage-lending-statistics-q2-2026  

Contact:

For more information or to speak to a spokesperson please contact Chloe Musto on 07724980666 or at press@positivemoney.org.uk  

About Positive Money:

Positive Money is an international research and campaign organisation working to redesign our economic system for social justice and a liveable planet. Set up in the aftermath of the financial crisis, Positive Money is a not-for-profit company funded by charitable trusts and foundations, as well as small donations from its network of supporters. Find out more: www.positivemoney.org  

ENDS