Are we entering the age of the marathon mortgage?

Despite a post-Covid housing boom, the number of first-time buyers hit a 15-year high in 2021 and that number declined only slightly last year. How? Because of the rise of ultra-long mortgage deals, stretching to 35 or even 40 years, says Hannah Fearn

Many new homeowners will be making repayments up to retirement age (Getty/iStock)

In the first weeks of the Covid-19 pandemic, the UK housing market was artificially closed down. Moving house was banned, renters were required to outstay their official tenancy agreements, landlords were prevented from commencing eviction proceedings. It must be true that abstinence breeds desire because when the market finally reopened again it boomed. House prices rose by 10 per cent a year, meaning properties in the wealthiest parts of London are now £120,000 more expensive than they were in 2020.

Given how expensive buying a house now is, it was anticipated that the number of first-time buyers would plummet in response. Yet that hasn’t happened. In 2021 the number of first-time buyers reached 408,379, a 15-year high. In 2022 the number declined slightly, but there were still 370,000 first-timers purchasing a home. With wages stalling and the cost of living crisis starting to bite, how was this possible?

Flummoxed as to why the first-time buyer market was still so buoyant, analysts began interrogating the details. Lockdowns had allowed prospective buyers to save more money towards their deposits, but there was more to it than that. First-timers were buying in large numbers because of the rise in the number being offered ultra-long mortgage deals – many taking out arrangements over 35 and even 40 years.