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.