Average Personal Guarantee-Backed Business Loan Exceeds Average U.K. House Price

Small business owners who sign a personal guarantee to secure finance are now, on average, borrowing more than a typical UK home is worth. Figures released in September 2026 tie the shift to 18 months of climbing costs, with higher National Insurance contributions a notable driver, and they arrive as directors look to the October Budget for some certainty.

The numbers come from Purbeck Insurance Services, which says it is the only UK firm offering personal guarantee insurance to the owners and directors of small and medium sized businesses. Its own Q2 2026 analysis puts the mean personal guarantee-backed loan at £317,000. Over the same quarter, the UK House Price Index from HM Land Registry recorded a mean UK property price of £271,204.

The comparison matters because a director’s family home is often the asset standing behind a personal guarantee. Should the company fail, that home can be on the line. According to Purbeck, the data shows starkly how much extra risk owners of smaller firms have taken on, with borrowing now larger than the value of the family home in many cases.

Regional picture and the longer trend

The median figure points the same way. At £190,000, the median loan is not far below the North West’s mean property price of £218,222. That region is now also where the Prime Minister’s new Number 10 North is based.

Purbeck has tracked a broadly steady climb in both mean and median loan sizes since the first quarter of 2025. That rise has happened even though inflation has stayed low and the property market has been in the doldrums.

A call for certainty in the Budget

Todd Davison, MD of Purbeck Insurance Services, said:

“The October Budget must draw a line under the relentless rise in the cost of doing business. With fewer new firms being created and external finance increasingly used for working capital rather than investment, more directors are borrowing simply to keep their businesses moving. When that borrowing is backed by a personal guarantee, Government-imposed cost increases do not stop at the company’s balance sheet—they can put an owner’s home and savings at risk. The Chancellor must use the Budget to provide firm, credible certainty on tax and employment costs and avoid adding further burdens. Small-business owners cannot plan, invest or grow while they are waiting for the next fiscal hit.”

About Purbeck Insurance Services

Purbeck specialises in Personal Guarantee Insurance for SMEs, with the aim of supporting business confidence. Its policies are backed by Markel International Insurance Company Limited, an A-rated insurer (A.M. Best A, Fitch A+, S&P A) that is also a Purbeck shareholder. The firm is directly authorised and regulated by the Financial Conduct Authority, and it underwrites cover as an authorised Managing General Agent (MGA) of Markel.

The annual policy protects directors if a lender calls in the personal guarantee they gave when raising business finance. Premiums are competitively priced and set according to individual circumstances, and cover is available for guarantees signed against a wide range of business finance facilities.

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