The uptake of longer-term mortgages in the UK has significantly declined,..." />

Long-term mortgage uptake plummets in UK

The uptake of longer-term mortgages in the UK has significantly declined, with only 390 new loans taken out in August, a stark drop from 1,690 in March last year. This represents just 0.48% of all new loans, as British homeowners continue to favour shorter two- or five-year fixed rates, which accounted for 89% of new loans. Despite the introduction of European-style home loans by 12 banks, including Perenna and Kensington, the higher rates associated with long-term fixes deter buyers. Lewis Shaw from Shaw Financial Services noted: "Rates on long-term fixes are significantly higher than standard rates," leading many to avoid committing to lengthy terms. While politicians and economists advocate for longer-term loans as a solution to the housing affordability crisis, their higher costs and inflexibility remain significant barriers to adoption. 

The Times (21/10/2024)  

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