Economic Secretary to the Treasury, Andrew Griffith MP has endorsed the idea that LTFRMs are a good option for borrowers in the UK, following a meeting with LTFRM Alliance members and others in Parliament.
In an article in the Telegraph, it was noted that the roundtable discussion covered a number of “light touch regulatory changes” which would be needed to encourage more lenders to offer LTFRMs, including relaxing the loan-to-income limit and reducing capital requirements for long-term fixed mortgages.
The Economic Secretary was quoted as saying that he was “definitely interested” in LTFRMs, adding that “if a mortgage really is fixed [for the entire term] then the stress tests of affordability aren’t as relevant as there is no chance of payments rising.”
The article also quoted Christian Hilber, a professor at the London School of Economics, as saying British mortgage borrowers “are much more exposed” to interest rate risk as compared with those in the Netherlands, Denmark and the US where longer-term fixes are far more popular.
The LTFRM Alliance is delighted that the Economic Secretary has accepted the role that LTFRMs can play in addressing the current challenges in the mortgage market.
We urge Mr Griffith and his Treasury colleagues to expedite consideration of the changes needed to open up access to LTFRMs in the UK, to allow British borrowers to benefit from access to LTFRMs as soon as possible.