Long mortgage repayment terms on rise among first-time homebuyers
December 20, 2022 by Brendan O'Neill
Home owners
The latest industry research shows that half of people in the UK who bought their first homes this year signed up for mortgages with repayment terms lasting over 30 years.
This research was a collaboration between Accenture and UK Finance and it shows a big rise in long-term mortgages among first-time homebuyers compared with a decade ago. Back then, roughly one quarter of them had mortgages with 30-year-plus terms for repayment and the same situation is true among home movers.
More than a quarter of those chose very long-term mortgage repayments this year, while in 2012, the figure was less than one out of every 10. While there has been a steady rise in the numbers seeking loans with lengthy repayment periods since the financial crash of 2008, there was a sharp spike in the past 12 months. That is down to rising mortgage rates and house prices in the UK.
The research found that the people seeking out a mortgage now have higher incomes on average than in the past too. The first-time homebuyer average income during the third quarter of this year was nearly £60,000, which is a 17% increase on the figure for that same period in 2021.
Eric Leenders from UK Finance stated that while housing market activity is set to slow down next year, there will likely be opportunities among those seeking to refinance.
Mortgage advisors should look to use their CeMAP course knowledge to grab some of those refinancing customers as they emerge in the New Year.
Written by
Brendan O'Neill
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