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FTB longer mortgage terms nearly double since 2007: FCA

The FCA’s latest Sector Overview report states that 34 per cent of first-time buyer mortgages taken out in 2017 were set at terms of 30 years or over compared to 20 per cent in 2017.

The report is usually released once a year in April, and details changes in the financial services landscape over the last 12 months – in this case to mid-2018. It is used to inform the authority’s business plans for the coming year.

As well as detailing the proportion of longer mortgages taken out, the report also shows that FTBs who opted for a mortgage term of 20-25 years dropped from making up nearly half – 48 per cent – of borrowers to a quarter, at 25 per cent.

FTBs who managed to secure a term of up to 20 years remained at 10 per cent for both years.

This translates to 20 per cent of all new mortgage terms (including remortgages) being 30 years or over in 2017 versus just 5 per cent in 2007.

Further data shows that overall, mortgage holders are currently in a more resilient position than renters. A monthly mortgage bill or rent increase of £99 would cause 17 per cent of mortgage holders to struggle to make repayments, whereas for renters this figure stands at 55 per cent.

Moving the repayment increase to £299 would see 57 per cent and 88 per cent of mortgage borrowers and renters struggle, respectively.

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FTB mortgages reach decade high: Yorkshire BS

First-time buyer mortgage figures have hit their highest level in decade, according to data provided by Yorkshire Building Society. The building society collected its data until October 2018, with November and December projected within the analysis. The firm estimates that 367,038 FTBs secured mortgages in 2018, up drastically from the financial crisis in 2008 where just […]

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The value of an investment and any income from it can fall as well as rise and you may not get back the amount originally invested. Forecasts and past performance are not a guide to future performance. Some information and statistical data herein has been obtained from sources we believe to be reliable but in no way are warranted by us as to their accuracy or completeness. These are Neptune’s views and as such this document is deemed to be impartial research. We do not undertake to advise you of any change to our views.

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