Government considering 50-year mortgages that children can inherit

The government is considering plans to offer homeowners longer mortgages, including 50-year deals, that can be passed between generations, in a bid to stimulate housing demand and help more people gain a foot on the housing ladder.

The Japanese-style longer lending agreements could see people being able to buy a home with little or no expectation of completing mortgage repayments during their lifetime.

Instead, the property and outstanding debt would be passed on to their children.

Longer loan durations would allow home buyers to pay more for properties because they would have lower monthly payments.

With the housing market slowing, the government is keen to boost demand and is also considering 30-year fixed rate home loans, mortgages worth almost 100% of the property and ways to blend renting and owning a property.

Government attempts to make UK housing more affordable could push up property price.

“We want to find all sorts of creative ways to help people into ownership,” Johnson told the pres. “We need young people to have the confidence, to have the deposits, the mortgage packages to be able to get into ownership.”

The most popular mortgage length among first-time buyers is around 30 to 35 years but a multi-generational approach could extend that by decades.

But some commentators warned it would not address problems of low housing supply.

Scott Taylor-Barr, financial adviser at Carl Summers Financial Services, said: “I feel that Boris Johnson is coming at this from the wrong direction.

“It is not the mortgage market that is preventing people from becoming homeowners; it is the cost of property in relation to people’s earnings.”

 

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