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More first-time buyers in Huddersfield taking out mortgages for 35 years

A decade on from sub-prime mortgage crisis, borrowers are tying themselves into longer deals

Bigger mortgages on longer terms are growing as property prices recover

One in four first time buyers in Huddersfield are taking out a mortgage that will last 35 years or more.

A decade after the failure of Northern Rock due to financial problems caused by the sub-prime mortgage crisis, home loans at 95% or above are now rare.

But bigger mortgages on longer terms are growing as property prices recover, according to figures following a Freedom of Information request to the Financial Conduct Authority.

In 2016 some 25.1% of mortgages taken out by first-time buyers in the HD postcode area – 291 out of 1,159 – were for 35 years or more. In the first quarter of 2017, the proportion was even higher at 36.3%, compared with 17.8% in the same period in 2006.

Among first time buyers, 4.7% took out a mortgage that was at least four-and-a-half times their income in 2016 against 8.1% in 2007 just as the financial crash hit.

Lenders are limited to approving mortgages of this size to no more than 15% of customers in each quarter. Overall in the postcode area in 2016, 3.6% of mortgages were this size.

In 2007, some 20.8% of first-time buyers took out a home loan at 95% or higher – with mortgages at 100% or more available. Last year, just 0.5% of mortgages were approved at 95% or above. For all loans, the figure was just 0.2%.

However, mortgages through the government’s Help to Buy schemes were available with as little as 5% deposit from the buyer, with the Government either lending or guaranteeing a bigger proportion of the loan.

Across the UK last year, 28.1% of mortgages taken out by first-time buyers – 87,676 out of 312,497 – were for a term of 35 years or longer. The proportion in the first quarter of 2017 stood at 30% compared with 13.8% in 2006.

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