Clarky Cat Posted July 2, 2022 Share Posted July 2, 2022 This would only make a difference if ultra-low rates continued given that 35 year mortgages are already popular. At say a 6% mortgage rate there is only about an 8% reduction in mortgage payments between a 35 and a 50 year mortgage so perceivably they could borrow a bit more but not a massive amount. The only thing it does do is massively increase the overall repayment. Quote Link to comment Share on other sites More sharing options...
winkie Posted July 2, 2022 Share Posted July 2, 2022 Housing is the economy and all the millions of jobs connected to it succeeding......the debt tied up in land and buildings must make up a huge chunk of our GDP. Quote Link to comment Share on other sites More sharing options...
Roman Roady Posted July 2, 2022 Share Posted July 2, 2022 37 minutes ago, Lucky Larry said: Last roll of the dice , we've increased the multiples people can borrow , reduced rates to zero so they can make the repayments and now we will extend the repayment time by 100% and make their children pay it. Unfortunately mortgages have helped balance the bankers books by making an IOU a tier 1 asset , fortunately if this is all they can come up with then the can has met the end of the road, unfortunately it will take a few banks down as well. 12 minutes ago, rantnrave said: This. Intergenerational mortgages are in effect the end of the line - the last prop after everything else has been done. I believe these were implemented in Japan just before the bubble there massively popped. It does however leave absolutely no doubt that the current government views house price falls as a very serious electoral liability. As said in another post here, they've not got the funds to throw at the market though. This and this, even though the second says "this" to the first...errm, I second the second "this". Anyhow, the HPC fox is in the Hen House. I am off to write speeches for BJ. Quote Link to comment Share on other sites More sharing options...
Freki Posted July 2, 2022 Share Posted July 2, 2022 This government is trying to use the same old and failed recipes. The only thing they matters is to prop the market. Housing for young people comes long last in the priority list. Disgusting and vile Quote Link to comment Share on other sites More sharing options...
spyguy Posted July 2, 2022 Share Posted July 2, 2022 10 hours ago, Si1 said: What do we think the chances of it happening are?? 0, ZIlch, Square root of f-all. Commented on this elsewhere. Daft lefties in the media. R4 man goes - 'Mirror, Guardian ... FT' Its not in the FT. My cutnpaste - Again. random from the idiots in the personal finance pages. What happened to the 40y fix mortgage??? R4 ... breathless reporting .. 50y generation mortgage ... Then went thru the papers --- Mirror .... Guardian .. FT. There is no article on the FT. Ive looked. Theres this in the FT personal finance bit - UK mortgage rates rise at fastest pace in a decade House price growth expected to slow as buyers’ incomes are hit by higher interest and jump in cost of living https://www.ft.com/content/c41094b4-050d-4522-88ad-fc9a9829bd80 , heres the lefty papers - Tories draw up plans for 50-YEAR mortgages that your kids would keep paying when you die Boris Johnson has confirmed he is looking at controversial cross-generational mortgages - house loans that last so long, they are handed on to your heirs to keep paying back https://www.mirror.co.uk/news/politics/tories-draw-up-plans-50-27377781 Children could be landed with their parents’ debt after they die under latest Tory plans to tackle the chronic housing crisis. Families will be offered ultra-long mortgages that can be passed between generations under plans being drawn up by the Government. Banks and building societies will be encouraged to let buyers borrow over terms of up to half a century or even longer so they can move into bigger homes. They would not be expected to finish paying off their mortgages during their lifetimes, under the controversial proposal. Instead, they would be able to hand over their properties to their children, including the outstanding debt. Ministers believe the plan will give people the chance of moving into their dream home as they will be able to take out larger loans. It comes after the Prime Minister last month vowed to turn “Generation Rent” into “Generation Buy” by launching an independent review of Britain's mortgage market with the aim of increasing the availability of 95% loans. Offering deals with such low deposits was widely blamed for fuelling the 2007-08 financial crisis. Mr Johnson said on Friday: “I do think there's a lot more scope to help people with 95% mortgages, there are quite a few products available now, which we've tried to encourage. “But also, we want to find all sorts of creative ways to help people into ownership. “Last year, actually, we had 400,000 first time buyers, that's a great number, we're starting to turn the tide, but it is crucial for this government and for our overall economic story if those numbers continue to be strong. Boris Johnson vowed to “find all sorts of creative ways to help people into ownership” ( Image: PA) “We need young people to have the confidence, to have the deposits, the mortgage packages to be able to get into ownership.’ Asked if he was considering cross-generation mortgages that could be passed between parents and children, the PM replied: “Yes, certainly.” That? They are basing the article on that???? And my f always popping up favourite - Perenna, a new lender, has said it intends to roll out 50-year mortgages in the future. https://www.mortgagesolutions.co.uk/better-business/2022/03/18/busting-long-term-fixed-rate-mortgage-myths-perenna/ If anyone has the number of mortgages Perenna has issued then I love to know. Theyve been talking ******** about these mortgages. Its a crappy fintech that seems to spend its time getting daft article in the personal finance pages rather than making money More lefty papers on the same thing - https://www.theguardian.com/money/2022/jul/01/no-10-considers-50-year-mortgages-that-could-pass-down-generations https://www.theguardian.com/money/2022/jul/01/fifty-year-home-loans-would-get-more-on-ladder-but-come-with-risks By spreading the repayments over longer – the average for mortgages taken out this year is 29 years – buyers should be able to borrow up to eight times their income, rather than the current average of 3.2 times, say potential providers. The loans would be backed by borrowing from pension funds and insurance companies rather than against less stable consumer deposits, to satisfy the Bank of England’s prudential requirement. Mortgage funding dont come from consumer deposits FFS. BoE is moving to get more n more mortgage debt off its books. How does increasing term allow someone to borrow 8x more???? A long-term fixed-rate mortgage could allow a household with a £50,000 annual income to borrow £400,000 instead of about £150,000, and thereby unlock the bind many renters find themselves in where they cannot get a mortgage on the property they live in despite repayments being lower than the rent. 400k @ 5% for 50y is 1800/m Fails MMR. 400k @ 5 % for 25y = 2300/m Messing around the mortgage terms does not make the mortgage cheaper. Ditto you would not get a bank signing up a a kid under 18 to support their parents mortgage. By the time the kid is old enough to have some earnings to lend against, the parents will be too old to get mortgage. This is daft lefty bbc mirror guardian, innumeracy, bad Tories, for properdee. It is an attempt to solve a serious problem. Last year full-time employees in England could typically expect to spend about 9.1 times their workplace-based annual earnings on buying a home; an increase from 7.9 times earnings in 2020, according to the Office for National Statistics. Eh? Perenna, a new firm awaiting its licence, plans to offer the long-term loans. Its co-founder, Colin Bell, said: “Long-term fixed-rate loans really appeal to first-time buyers. One of the reasons they can’t get on the ladder is they don’t meet affordability tests that rightly have to take into account interest rate rises. They can get a mortgage, but it’s a small one.” Still???? Theyve been waitign for their license for years. https://www.finextra.com/newsarticle/37292/perenna-raises-10m-to-bring-fixed-for-life-mortgages-to-the-uk 18 January 2021 London-based fintech Perenna has raised $10 million to back its plans to obtain a banking licence and bring "fixed for life mortgages" to the UK housing market this summer. Created 2013. https://find-and-update.company-information.service.gov.uk/company/08479556 Still no license in 2022. https://www.perenna.co.uk/about https://www.perenna.co.uk/join-waitlist Join the Waitlist Be first to get a mortgage from us Quote Link to comment Share on other sites More sharing options...
spyguy Posted July 2, 2022 Share Posted July 2, 2022 10 hours ago, Shamus said: So angry to hear this. It's totally ********. Will this almost double current prices - insane! You will own nothing and be happy... Why? Its a combination of lazy lefty properdee jounro being fed BS by a finco thats trying to raise finance for 10 years. Fake news doesnt do it justice. Quote Link to comment Share on other sites More sharing options...
bartelbe Posted July 2, 2022 Share Posted July 2, 2022 Utter joke and a complete waste of time. The housing bubble is sustained by cheap debt, the only way prices can increase by insane amounts each year is if people can borrow more and more. To sustain this they keep moving the goal posts. Insanely low interest rates, tax cuts, help to buy, allow banks to recklessly lend and now this madness. Yet all these measures are futile because whatever they do, eventually a point will be reached in which mortgages become unaffordable and the market collapses. Quote Link to comment Share on other sites More sharing options...
spyguy Posted July 2, 2022 Share Posted July 2, 2022 9 hours ago, Habeas Domus said: It does show that someone is getting desperate. For this to work, either the parents have to conveniently die just as the children are ready to start their own family, or more likely have 3 generations living under one roof until they snuff it. Lazy arsed filled on the personal finance pages. Quote Link to comment Share on other sites More sharing options...
spyguy Posted July 2, 2022 Share Posted July 2, 2022 3 minutes ago, bartelbe said: Utter joke and a complete waste of time. The housing bubble is sustained by cheap debt, the only way prices can increase by insane amounts each year is if people can borrow more and more. To sustain this they keep moving the goal posts. Insanely low interest rates, tax cuts, help to buy, allow banks to recklessly lend and now this madness. Yet all these measures are futile because whatever they do, eventually a point will be reached in which mortgages become unaffordable and the market collapses. Extending mortgage terms beyond ~25y does not make the repayment materially cheaper. If only theres was something like an online mortgage calculator where you could enter numbers in .... Quote Link to comment Share on other sites More sharing options...
spyguy Posted July 2, 2022 Share Posted July 2, 2022 1 hour ago, winkie said: Housing is the economy and all the millions of jobs connected to it succeeding......the debt tied up in land and buildings must make up a huge chunk of our GDP. This is murky. Housing assets make up a large part of UK wealth. Mortgage market ... less so. UK mortgages are shrinking, becoming a smaller n smaller pool of people. Quote Link to comment Share on other sites More sharing options...
spyguy Posted July 2, 2022 Share Posted July 2, 2022 1 hour ago, Clarky Cat said: This would only make a difference if ultra-low rates continued given that 35 year mortgages are already popular. At say a 6% mortgage rate there is only about an 8% reduction in mortgage payments between a 35 and a 50 year mortgage so perceivably they could borrow a bit more but not a massive amount. The only thing it does do is massively increase the overall repayment. Mortgages with terms longer than 25y only make sense when IR are 0. Higher than ~2% and you want to reduce the term ASAP. This is gormless poof pieces from https://www.theguardian.com/money/2022/jul/01/fifty-year-home-loans-would-get-more-on-ladder-but-come-with-risks Perenna, a new firm awaiting its licence, plans to offer the long-term loans. Its co-founder, Colin Bell, said: “Long-term fixed-rate loans really appeal to first-time buyers. One of the reasons they can’t get on the ladder is they don’t meet affordability tests that rightly have to take into account interest rate rises. They can get a mortgage, but it’s a small one.” A 2bit finco who still do not have bank license after ~10y. Google them. By spreading the repayments over longer – the average for mortgages taken out this year is 29 years – buyers should be able to borrow up to eight times their income, rather than the current average of 3.2 times, say potential providers. The loans would be backed by borrowing from pension funds and insurance companies rather than against less stable consumer deposits, to satisfy the Bank of England’s prudential requirement. That bit alone shows how gormless and fwitted the jounro is. Quote Link to comment Share on other sites More sharing options...
Freki Posted July 2, 2022 Share Posted July 2, 2022 @spyguyhave you bothered looking at the first 3 posts before going on a rant about "lefties"? Quote Link to comment Share on other sites More sharing options...
ARENAPUA Posted July 2, 2022 Share Posted July 2, 2022 Wake up. House prices are never going to be allowed to revert to the mean. After the lengths the government/BoE has gone to in the last 11 years to keep the Ponzi scheme afloat, nothing surprises me anymore. They’re going all in. Get onboard before it’s too late. At age 51 now, I am. https://www.dailymail.co.uk/news/article-10974931/Families-offered-mortgages-50-YEARS-pass-children.html?fbclid=IwAR0w8KKtJlnYGaquCbQatD91pEMlpzbrsNmb0UtT9_9rM8l-KetIyzEk3_E Quote Link to comment Share on other sites More sharing options...
spyguy Posted July 2, 2022 Share Posted July 2, 2022 23 minutes ago, Freki said: @spyguyhave you bothered looking at the first 3 posts before going on a rant about "lefties"? After hearing the article feature on the BBC, I googled. The issue is only mentioned/gone into detail, if you can it that, in Guardian.The BBC mentioned the FT. Its not in the FT. Again, its lazy, lefty, properdee obsessed journo malign a fuss about nothing. Quote Link to comment Share on other sites More sharing options...
spyguy Posted July 2, 2022 Share Posted July 2, 2022 Googling '50 year home loans uk' Gives, in order - https://www.theguardian.com/money/2022/jul/01/no-10-considers-50-year-mortgages-that-could-pass-down-generations https://www.theguardian.com/money/2022/jul/01/fifty-year-home-loans-would-get-more-on-ladder-but-come-with-risks https://www.mirror.co.uk/news/politics/tories-draw-up-plans-50-27377781 And - https://www.spectator.co.uk/article/longer-mortgages-won-t-fix-britain-s-broken-housing-market https://www.express.co.uk/comment/expresscomment/1634278/family-mortgages-homeowners-boris-johnson-travel-chaos Quote Link to comment Share on other sites More sharing options...
btd1981 Posted July 2, 2022 Share Posted July 2, 2022 Would this package only be offered to those with children already? If not, what if there are no kids to pass on to, or what if they have special needs? Surely this idea is as unworkable as it is undesirable. Quote Link to comment Share on other sites More sharing options...
byron78 Posted July 2, 2022 Share Posted July 2, 2022 3 minutes ago, spyguy said: Googling '50 year home loans uk' Gives, in order - https://www.theguardian.com/money/2022/jul/01/no-10-considers-50-year-mortgages-that-could-pass-down-generations https://www.theguardian.com/money/2022/jul/01/fifty-year-home-loans-would-get-more-on-ladder-but-come-with-risks https://www.mirror.co.uk/news/politics/tories-draw-up-plans-50-27377781 And - https://www.spectator.co.uk/article/longer-mortgages-won-t-fix-britain-s-broken-housing-market https://www.express.co.uk/comment/expresscomment/1634278/family-mortgages-homeowners-boris-johnson-travel-chaos That'll be your personal Google preferences etc. I get the Telegraph first. https://www.telegraph.co.uk/politics/2022/07/01/fifty-year-mortgages-pass-children-new-plan-boost-home-ownership/ Quote Link to comment Share on other sites More sharing options...
spyguy Posted July 2, 2022 Share Posted July 2, 2022 2 minutes ago, btd1981 said: Would this package only be offered to those with children already? If not, what if there are no kids to pass on to, or what if they have special needs? Surely this idea is as unworkable as it is undesirable. It wont be offered to anyone. Its gormless finco, who are unable to get off the ground/banking license, trying to run with a off the cuff remark from Bozza at a NATO conference. Gormless weekend person finance pages page filla. Life cos will *NOT* be funding 50y mortgages. Life companies *will* build a number of Barbicans in towns n cities up and down the country, for rent. Quote Link to comment Share on other sites More sharing options...
CityLAD88888 Posted July 2, 2022 Share Posted July 2, 2022 (edited) https://www.bloomberg.com/news/articles/2022-07-01/johnson-weighs-50-year-mortgages-that-children-can-inherit?srnd=premium-uk Bloomberg covered the story quite well I feel, calling it out for the prop that it is, 30 year fixed rate mortgages also being looked at, so basically they're telling us they take 40/45% of yours and my hard earned in tax to punt on a losing trade in the swaps market handing free money to the landlord classes, it's a joke that these clowns are our main 'free market' choice at the ballot box. This is my worry at the moment, we've been here before: Brexit, Covid (particularly), all looked like a perfect storm until they pulled the big prop guns out from nowhere. I agree it seems pretty intractable this time: we're broke, no money left for props, interest rates are going to have to rise, etc. etc. but I wouldn't put it past them ... Edited July 2, 2022 by CityLAD88888 edited for clarity Quote Link to comment Share on other sites More sharing options...
Si1 Posted July 2, 2022 Share Posted July 2, 2022 2 hours ago, spyguy said: It wont be offered to anyone. Its gormless finco, who are unable to get off the ground/banking license, trying to run with a off the cuff remark from Bozza at a NATO conference. Gormless weekend person finance pages page filla. Life cos will *NOT* be funding 50y mortgages. Life companies *will* build a number of Barbicans in towns n cities up and down the country, for rent. Is their practical funding model to spend venture capital on executive wages and probably go bust at some point? Quote Link to comment Share on other sites More sharing options...
Si1 Posted July 2, 2022 Share Posted July 2, 2022 2 hours ago, btd1981 said: Would this package only be offered to those with children already? If not, what if there are no kids to pass on to, or what if they have special needs? Surely this idea is as unworkable as it is undesirable. It is deeply undesirable. I imagine basically the children would get an option to take over the mortgage at some point and if they don't exercise it then house gets repo'd. I can't see how it could work otherwise. Quote Link to comment Share on other sites More sharing options...
andrewwk Posted July 2, 2022 Share Posted July 2, 2022 3 hours ago, ARENAPUA said: Wake up. House prices are never going to be allowed to revert to the mean. After the lengths the government/BoE has gone to in the last 11 years to keep the Ponzi scheme afloat, nothing surprises me anymore. They’re going all in. Get onboard before it’s too late. At age 51 now, I am. https://www.dailymail.co.uk/news/article-10974931/Families-offered-mortgages-50-YEARS-pass-children.html?fbclid=IwAR0w8KKtJlnYGaquCbQatD91pEMlpzbrsNmb0UtT9_9rM8l-KetIyzEk3_E yes, the omnipotent UK government (who have successfully maintained stable inflation, they are that powerful!) will definitely not allow it. Quote Link to comment Share on other sites More sharing options...
NuBrit Posted July 2, 2022 Share Posted July 2, 2022 Utterly despicable proposal, but hardly surprising. This is after all brought to you by the same government that offered a 2% wage rise to rail workers, but gave 10% to pensioners. It's party policy to protect the grey vote at any cost, even if it means shafting young people. The Tories truly are the party of the sow that eats her own piglets. Quote Link to comment Share on other sites More sharing options...
BaldED Posted July 2, 2022 Share Posted July 2, 2022 I wonder if this has come out of right to buy proposal. They have realised that those on benefits of £150 pw will need to have a 50 year mortgage to pay for it. Genius. 🤣 Quote Link to comment Share on other sites More sharing options...
Horseradish Posted July 2, 2022 Share Posted July 2, 2022 https://www.theguardian.com/money/2022/jul/01/no-10-considers-50-year-mortgages-that-could-pass-down-generations Sign yourself up for indentured servitude so that house prices won't crash. More death-cult of no house price falls. It's going to be so ugly when they do. At least they manage to put the counterpoint in the article; albeit in the very last paragraph: Quote It seems governments the world over will do anything to avoid the alternative of property prices actually falling Quote Link to comment Share on other sites More sharing options...
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