Historically, the UK population has had a love affair with property ownership, resulting in an extremely high percentage of people owning their own home.
Over the years, this has resulted in a well-developed and sophisticated market with fierce competition among lenders to attract new borrowers. Less attention has been paid to retaining these customers, with the result that it is now common for borrowers to review their mortgage every five years or so and in some cases more frequently.
Borrowers have never had it so good, which makes it difficult to accept new concepts even if lenders would love to find a way to introduce greater stability and wider margins that longer-term fixed rates provide.
The few long-term rates in the UK tend to last a maximum of 10 years and while these can be of excellent value for some, the long-term redemption penalties mean most see these as too inflexible for their changing financial needs.
Northern Rock has a 15-year fixed rate at 5.49% and the Cheshire BS has a 25-year product at 5.79%, but these are rare. Both have redemption penalties throughout the term, whereas similar products on the Continent do not. They typically allow borrowers to switch rapidly to new terms.