The Household Finance Review, a quarterly report which looks at the state of the nation’s domestic budgets, also raised concerns about buyers being unable to shorten their mortgages in later property purchases.
Adrian Anderson, of broker Anderson Harris, said: “It [40-year mortgages] is a bit of a concern. The average age of people taking out a mortgage now is older than it used to be because people are having to wait longer to try and save to get on to the ladder.”
In 2022-2023, the average age of a first-time buyer was 34, meaning that they would not repay a 40-year term until they were well into their seventies.
Mr Anderson added: “You could get to a stage where people are wanting to retire but actually they’ve still got however many years left on their mortgage.”
Longer terms became much more popular in the wake of Liz Truss’ disastrous mini-budget, as mortgage rates soared.
The average two-year fix with a 75pc loan-to-value (LTV) is now 5.89pc, whereas a five-year fix stands at 5.39pc, according to data from comparison website Uswitch.
At the end of 2021, the average fixed-rate mortgage had an interest rate of just 1.94pc, according to data from the Office of National Statistics.
A number of lenders have pulled high loan-to-value mortgages in recent days, piling more pressure onto first-time buyers.
Hanley Building Society withdrew a two-year fixed deal which required a 5pc deposit, and the Principality Building Society pulled offers for 95pc LTV.
Saffron Building Society and Vernon Building Society both pulled deals at a 90pc LTV, and Vernon also dropped a five-year fix at 95pc.
Rachel Springall, of analyst Moneyfacts, said the lenders pulling rates was not a “mass exit” but would be disappointing for first-time buyers.
“The deals that have disappeared last week may well resurface, perhaps when re-pricing activity picks up in the coming weeks,” she said.