Responding to the call by Housing Minister, Grant Shapps MP for more long-term fixed rate mortgages, Paul Broadhead, Head of Mortgage Policy for the Building Societies Association said:
We welcome the prospect of an inclusive debate on any measures which will help lenders lend and consumers borrow. We also endorse the Government's aim for a stable and we presume active housing market.
Longer-term fixed rate mortgages have been offered in the past but with limited consumer demand. Ten-year rates are currently available and lenders do respond with new products where demand exists.
The challenge with fixed rate mortgages is always the balance between price and flexibility for the consumer. The more flexible a fixed rate is the more expensive it is for lenders to fund with the knock-on higher cost to consumers. We are keen to hear more about the Minister's ideas on new sources of long-term market funding.
We would certainly not advocate a 'one-size fits all approach' to mortgages. It is right for lenders to offer a range of products which suit the different needs of individual consumers.
Rachel Wylie - 07773 489644 / firstname.lastname@example.org
Notes to Editor:
1. Link to DCLG press release - http://www.communities.gov.uk/newsstories/newsroom/2012570
2. The Building Societies Association (BSA) represents mutual lenders and deposit takers in the UK including all 48 UK building societies. Mutual lenders and deposit takers have total assets of over £365 billion and, together with their subsidiaries, hold residential mortgages of almost £235 billion, 19% of the total outstanding in the UK. They hold more than £245 billion of retail deposits, accounting for 22% of all such deposits in the UK. Mutual deposit takers account for about 36% of cash ISA balances. They employ approximately 50,000 full and part-time staff and operate through approximately 2,000 branches.
3. Photographs of Paul Broadhead are available from the BSA press office, from the Association's website at www.bsa.org.uk or Headlinemoney www.headlinemoney.co.uk
Policy and External Affairs Officer
Building Societies Association
6th Floor, York House