Rise of 40-year mortgage ‘puts future of young buyers at risk’
Why that tipple on a long-haul f light can be bad for your heart
ULTRA-LONG mortgages will ‘come home to roost’ as households are left with less money towards retirement, a trade body has warned.
Borrowers are increasingly taking out home loans lasting up to four decades as they struggle to get a foot on the housing ladder amid rising prices.
one in five mortgages for first-time buyers is for a term longer than 35 years – twice the proportion seen just two years ago. In 2005, it was only 2 per cent.
‘The longer a customer needs to make mortgage payments, the less free income they may have over this period for other important considerations, not least contributions into their pensions,’ according to a report by UK Finance.
‘This trend of longer-term borrowing has the potential for wider societal implications, albeit that these may not come home to roost until some years down the track.’
The comments, in a quarterly review of household finances, said this was an example of the ‘affordability crunch’ facing borrowers.
Ultra-long mortgages began to snowball in the wake of Liz Truss’s mini-Budget in September 2022 when borrowing rates soared.
At the start of that year, loans stretching more than 35 years represented just 8 per cent of first-time buyer mortgages. But that rose to 17 per cent by the end of 2022 before peaking at 23 per cent in December last year.
Although mortgage rates have eased from their highest levels, the proportion of extralong deals was only down to 21 per cent in March.
UK Finance said the proportion of loans with terms up to 40 years ‘remains far higher than we have seen in the past’ for ‘all types of borrower but most significantly among first-time buyers’.
Many homebuyers will not keep the same deal over the full term, often moving house or switching to a new loan, it added. ‘However, the small but increasing minority of both home mover and remortgage customers borrowing at these longer terms points to more entrenched affordability issues,’ the report said.
‘Rather than just stretching terms as a means of improving affordability to enter the market, more customers are needing to do this in subsequent mortgages, further on in their homeownership journeys and working lives.’
David Hollingworth, an associate director at broker L&C Mortgages, said: ‘Taking a mortgage over a longer term may help with the initial monthly payments but the cost will mount up substantially over time.
‘Borrowers need to be disciplined in reviewing the term, or overpaying wherever possible, to reduce that burden.
‘If not, it will continue to have a bigger impact on disposable income for longer, which could have knock-on consequences for saving and for resources in retirement.’
Former pensions minister Baroness Altmann said: ‘If the only option for people is to get a longer-term mortgage then for many that is better than paying rent which will also prevent them saving.
‘The issue for me is to ensure lenders don’t profiteer on these long-term loans as borrowers do end up paying back more the longer the term.’
UK Finance added that the wider mortgage market remained constrained in the first quarter of 2024.
Borrowing was down on the same quarter of last year, despite signs in 2023 that the market was picking up.
Eric Leenders, managing director of personal finance, said: ‘Some households were in a better place financially in Q1 this year but we are not out of the woods yet.’
‘They’ll save less for retirement’
THERE’S nothing quite like that first glass of wine or pint of beer to get you in the holiday mood at the airport.
However, it’s not all cheery news as alcohol plus cabin pressure may also threaten the heart health of sleeping plane passengers, suggests the first study of its kind.
Researchers found that this combination lowers the amount of oxygen in travellers’ blood and raises the heart rate, even in those who are young and healthy.
The bigger the amount drunk, the greater these effects could be, particularly among older passengers and those with medical conditions, they warned. The academics suggested that it may be time to consider limiting on-board access to alcohol, particularly on long-haul flights.
For their study, they recruited 48 people aged 18 to 40. Half slept in a laboratory with normal air pressure and the others in an altitude chamber mimicking the cabin pressure of a plane at cruising height.
Then the groups slept for four hours, half in each one having drunk no alcohol while the others drank the equivalent of two cans of beer or two glasses of wine.
Those who slept in normal conditions with no alcohol had steady blood oxygen levels at around a healthy 96 per cent with a sleeping heart rate of 64 beats per minute (bpm). But those who drank and were in the altitude chamber had a fall in blood oxygen levels to an average 85 per cent and their heart rates typically rose to nearly 88bmp during sleep.
This compared to an average blood oxygen level of 88 per cent and a sleeping heart rate of 73bpm for those in the altitude chamber who had no alcohol.
The participants slept lying down so the findings may differ for those who fly economy, said a report in the journal Thorax by the team from the Institute of Aerospace Medicine in Cologne, Germany.
FEWER women are drinking beer, with many fearing it will make them fat, said a study. Just 14 per cent indulge weekly, compared to half of men, and the number has fallen from 17 per cent in 2018, said Dea Latis, a group for female beer-lovers.
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A SKIN cancer vaccine being trialled by the NHS can halve the risk of dying or the disease returning, results show.
In the longest study on the treatment yet, melanoma patients given the personalised jab alongside immunotherapy drug Keytruda were 49 per cent more likely to be alive three years later compared to those taking Keytruda alone – the current standard of care.
Experts said they ‘fully expect’ similarly impressive results in trials of vaccines on other cancers, including breast and bowel.
Developed by pharma giants Moderna and MSD, the vaccine is custom-built for individuals using the specific genetic makeup of their tumour – giving it the best chance of a cure. Injected in patients after they have undergone surgery, it works by telling the body to hunt down cancer cells to prevent the deadly disease from coming back.
The trial, presented at the American Society of Clinical Oncology (ASCO) conference in Chicago, involved 157 patients with stage 3 or 4 of the deadliest type of skin cancer.
Iain Foulkes, executive director of research and innovation at Cancer Research UK, said the findings complement the ‘exciting, developing landscape of cancer vaccine research’.
A second trial presented in Chicago found that vaccines can significantly improve survival for breast cancer patients after surgery. Led by a team at the University of Vienna, the vaccine – tecemotide – increased survival by 16 per cent in 400 patients with early stage breast cancer.
Lead author Dr Christian Singer said: ‘This is the first profound long-term survival benefit of an anti-cancer vaccine in breast patients.’