First time buyers not enticed by long-term fixes

31-Jul-2007

Would-be first time buyers considering their borrowing options prior to purchasing a home are largely not interested in long-term fixed-rate deals, new research from Abbey shows.

A study investigating the hypothetical desire for such products across the entire housing market found that just 23 per cent would consider a 25-year mortgage, with 54 per cent saying they would definitely not take out such a deal.

Earlier this month Nationwide was one of the first lenders to react to positive governmental comments on the subject by announcing the reintroduction of its own long-term deal, but Abbey suggests this is unlikely to be a success.

"It is clear that the public don't have much of an appetite for 25-year mortgages. This is borne out by Abbey's own experience - we have launched 25-year mortgage products in the past - all of which had limited demand," commented Abbey Mortgages director Sue Hayes.

"We continue to see increasingly strong demand for our five and ten year fixed deals, indicating that 25 years is just a step too farm," Ms Hayes added.

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