Mortgage lenders are no longer offering long-term mortgages of more than 15 years, according to market analysis from Moneyfacts.co.uk.
Despite calls from the Government to aid stability in the mortgage and housing markets by offering longer-term fixed rate mortgages, since Manchester Building Society withdrew its 30 year fixed rate mortgage this week, the longest a homeowner can fix for is now 15 years.
Gordon Brown requested in 2007 that mortgage lenders make more long-term fixed rate mortgages available in order to reduce volatility in the housing market, and several moved to fill this gap in the market, but since then, the market has completely disappeared, the financial information website has found.
In July 2007, just three building societies were offering 25 year fixed rate mortgages; a year later, following the Prime Minister's calls for more choice in this sector, eight mortgage lenders offered them, but by January this year, the figure had fallen back to three, and now there are none, Moneyfacts' figures show.
Commenting on the drought in the long-term fixed rate mortgage market, Moneyfacts spokesperson Dan Cook explained that the base rate is Iargely to blame for the lack of these loans, because lenders do not want to offer a long term fixed rate mortgage when interest rates are low and the only way they can go is up.
"With so little funds available, lenders are concentrating on their core business of shorter term deals," he said.
The only 15 year fixed rate deal is from Britannia Building Society mortgages, which starts at 6.49 per cent so is not expected to pose an attractive option to prospective borrowers.
There are nine lenders offering 10 year fixes, Moneyfacts found, but the majority are not offering any longer than five year fixed rate mortgages.
"Long term deals may be unappealing to borrowers, particularly in an unsettled economic environment," Mr Cook continued. "Borrowers currently do not want to be tied in to long term deals and instead prefer stability in the short term, with have the freedom to make crucial changes afterwards.
"Providers and brokers alike prefer the frequent turnover of shorter term deals as they can ensure borrowers are on an appropriate deal for the market conditions."
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