The Labour Party has proposed introducing 25-year fixed term mortgages should it win the next General Election.
Shadow chancellor Rachel Reeves suggested longer fixed-rate deals would help people buy homes with smaller deposits and with lower monthly repayments.
A Labour review of financial services is working with the mortgage industry to find ways to remove regulatory barriers to this, The Times reports.
She Reeves told The Times: “In other parts of the world the housing market is less exposed to changes in interest rates than it is in Britain. More people are locked into longer mortgages.
“As a result, when you have volatility in mortgage rates, [which] we’ve seen on stilts in the UK, people are less affected in their pockets.
“If you are locked in for a 10, 25-year mortgage, those stress tests become redundant. Potentially you would be able to borrow a bit more, to put down a bit less of a deposit. If you can take out some of that stress and instability, that will make a difference.”
https://www.thetimes.co.uk/article/rachel-reeves-interview-fixed-mortgage-house-uk-zqtvbkgxn
