(qlmbusinessnews.com . Tues 3rd June, 2025) London, UK —
First-Time Buyers Now Taking Out Mortgages Averaging 31 Years Amid Housing Affordability Struggles
First-time buyers in the UK are now taking out mortgages with an average term of 31 years — a notable increase from 28 years a decade ago — as home affordability continues to pose a significant challenge.
Figures from UK Finance, the banking sector’s trade body, reveal that rising property prices and persistently high mortgage repayments are pushing buyers to opt for extended terms in order to reduce monthly costs. While interest rates have eased slightly in recent months, the trend towards longer mortgage durations shows little sign of reversing.
More worryingly, around 40% of newly issued home loans now involve borrowers making repayments well into their retirement years.
Lenders currently allow mortgage terms as long as 40 years, which have become particularly attractive to those in their 30s stepping onto the property ladder for the first time. Though this strategy reduces monthly outgoings, it significantly increases the total interest paid over the life of the loan.
UK Finance noted that, even with falling interest rates, the proportion of income being used on mortgage repayments remains high due to rising property prices. “Affordability has not improved markedly because the benefit of lower rates is offset by the continued escalation in house prices,” the organisation stated in its annual review.
There was a surge in property purchases earlier this year as buyers raced to beat the end of temporary stamp duty relief in England and Northern Ireland. The tax-free threshold for first-time buyers reverted on 1 April, applying only to homes worth £300,000 or less.
This led to a sharp increase in completions in March, with first-time buyer transactions more than doubling (up 113%) compared to the same month in 2023. Completions by existing homeowners soared by 140%.
However, the momentum has since slowed. Bank of England data shows a fourth consecutive monthly decline in mortgage approvals in April — a strong indicator of future borrowing intentions.
Despite these hurdles, market analysts suggest that low unemployment and underlying demand are helping to support activity in the housing sector. Robert Gardner, chief economist at Nationwide, said that the environment remains “supportive for prospective homebuyers,” despite broader economic uncertainty.
Nationwide reported that house prices rose 0.5% in May, lifting average UK property values to £273,427 — an annual increase of 3.5%.
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