A record number of people took out 30-year mortgages in the second quarter of 2014, according to data analysis by the Council of Mortgage Lenders.
During the period 19,300, or 20 per cent of house purchase loans, had a term over 30 years, compared to 27,000, or 18 per cent, in the previous quarter.
The data goes back to the second quarter of 2005, when just 5 per cent of mortgages were over 30 years.
The percentage of mortgages over 35 years was 3800, or 2 per cent, for the second quarter of 2014, and 3400, which again was 2 per cent, for the first quarter.
In a one-off analysis of regulated lending during this period, the CML also found that of 79,900 first-time buyers in the first quarter of 2014, some 22,600 had used mortgages over 30-year terms. This made up 28 per cent of the total.
In the first quarter of the year there were 68,800 first-time buyers, 18,200 of whom opted for 30-year terms. In that quarter, 30-year terms accounted for 26 per cent.
In the first quarter of 2013, 25 per cent of the 51,200 first-time buyers borrowed on 30-year terms.
Simon Webster, managing director of Kent-based Facts and Figures Financial Planners, said: “It has got a very easy answer: the regulator has effectively banned interest-only mortgages.
“People have got to pay the repayment as well as the capital so they are going for a 30-year term to control their costs.
“It’s sensible financial planning. People can always shorten the terms and accelerate the payments later if, for example, they get a bonus or a pay rise.”
In comparison, for the last four quarters, 4 per cent of first-time buyers opted for terms over 35 years.
| Time period | Number of house purchases | Term over 30 years | Percentage over 30 years |
| Q1 2013 | 116,800 | 19,300 | 17% |
| Q2 | 143,800 | 24,900 | 17% |
| Q3 | 168,000 | 27,500 | 16% |
| Q4 | 176,500 | 30,100 | 17% |
| Q1 2014 | 147,800 | 27,000 | 18% |
| Q2 | 171,000 | 33,600 | 20% |
