In July 2007, Prime Minister Gordon Brown announced that longer term fixed rate mortgages would help to reduce the volatility in the housing market. Following this announcement a number of lenders moved to offer such deals, but now the market has disappeared.
Lenders offering 25 year deals:
July 2007 - Cheshire BS * Kent Reliance BS * Manchester BS
January 2008 - Cheshire BS * Halifax Kent Reliance BS * Manchester BS * Nationwide BS * Norwich & Peterborough BS * The Co-operative Bank * Yorkshire BS
January 2009 - Manchester BS * Scarborough BS * The Co-operative Bank
Today - No deals available
Moneyfacts.co.uk spokesperson Darren Cook commented: "Raising the capital when interest rates are so low is difficult. Investor expect a higher rate of return than those currently being offered for terms of ten years plus, as the only way for base rate to go from here is up.
"With so little funds available, lenders are concentrating on their core business of shorter term deals.
"Britannia BS is the only lender to offer 15 year deals, but with rates starting at 6.49%, these are likely to be unattractive to many borrowers.
"Only nine lenders are offering ten year deals, with the majority of the market offering deals of no longer than five years.
"Long term deals may be unappealing to borrowers, particularly in an unsettled economic environment.
"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."
