Manchester’s decision means that UK borrowers will no longer be able to fix their mortgage rate for more than 15 years.
In July 2007, Prime Minister Gordon Brown had said that longer-term fixed-rate mortgages would help reduce the volatility in the housing market.
However, the market for this has disappeared despite the fact that many lenders had moved to offer these types of mortgages.
Moneyfacts.co.uk analyst Darren Cook says: “Raising the capital when interest rates are so low is difficult. Investor expect a higher rate of return than those currently being offered for terms of ten years plus, as the only way for base rate to go from here is up.
“With so little funding available, lenders are concentrating on their core business of shorter term deals. Only nine lenders are offering ten year deals, with the majority of the market offering deal of no longer than five years. Long term deals may be unappealing to borrowers, particularly in an unsettled economic environment.”