A UK Finance spokesman said: “We are seeing a continued, more rapid, increase in borrowing for more than 35 years. In other words, where customers are using term stretch to improve affordability, they are needing to lengthen the term even further.”
Analysis by the banking lobby group on Monday will show that first-time buyers would have to take out a 72-year loan to get their mortgage bills back to 2022 levels because of the impact of higher interest rates.
The industry body blamed a “significant” contraction in mortgage lending on an increasing number of young people being unable to get on the housing ladder.
Robin Down, an analyst at HSBC, has said there are now 1.3m fewer households with a mortgage compared with 20 years ago, with young people increasingly likely to be renting rather than owning their own home.
This is a “problem for UK mortgage lenders,” said Mr Down.
He said: “It’s first-time buyers (FTB) that drive growth in UK net mortgage lending. Thus as FTBs have fallen away, so has the growth in the UK mortgage market; over the last 15 years we’ve seen an average growth rate of just 2.3pc per year.”
This is down from around 10pc annual growth in the decade before the financial crisis.
