Some 20 per cent of first time buyers are snapping up mortgages of 35 years or more according to UK Finance.
In its Household Finance Review Q3 report, the trade body says the proportion of first time buyers taking out 35-year-plus mortgages jumped to 20 per cent in September, rising from just 13 per cent a year earlier.
The number of first time buyers that have taken out 30-to-35-year mortgages stood at 36 per cent in August and September, down from 37 per cent the previous year.
Both 30-to-35-year and 35-year-plus mortgage take up has risen hugely since first time buyer mortgage records began in April 2005, where they stood at just five and two per cent respectively.
Overall, 56 per cent of all first-time buyers in September 2023 took out a mortgage of over 30 years, with 33 per cent of movers taking out over 30-year mortgages.
The report also shows that nine per cent of movers chose loans with terms above 35 years, while the number of first-time buyers opting for loans over 35 years has more than doubled since the Bank of England started raising interest rates in December 2021.
James Tatch, head of analytics at UK Finance, says: “Rising interest rates and cost of living pressures, combined with high house prices have meant that buyers are looking for ways to stretch their affordability. Against this backdrop the proportion of first-time buyers who took out longer-term mortgages has crept up through 2023, although this trend looks to be moderating.”
