Should 40 year mortgages be banned?

No one that I know of said it was 'that easy' or any kind of easy but you have addressed your comment to me as if I did. You also make an assertion about 'very few' people having the required pension income. Lenders presumably have done their research and assessed whether there is a demand or a need for this in a population where most people have worked and may have acquired occupational pensions, state pensions, other earned or unearned income and other assets such as property equity.

I was going to say something like this. Do governments really have to get involved in every aspect of people’s lives? The financial ombudsman is not Mummy - adults taking out mortgages need to use their own good judgement.

There was a thread a little while ago which said that people expect the state to do absolutely everything. I might dig it out.

I wouldn't take one out personally, but I don't see it as my business to police what other people are allowed to do with their mortgages.

For some people it might be their only hope of getting on the ladder.

Property prices are high because we have too few houses for too many people. 40 years mortgages are a reaction to constrained supply driving up prices, but are not the cause of it. All that will happen if you reduce mortgage terms without improving availability of housing is that even fewer people will be able to buy a home.

I guess I was meaning generally- it was easier generally 20-30 years ago to buy and obtain a mortgage with a low deposit. It’s not easy now for people on comparable wages to 20/30 years ago. That is a fact. The amount of people renting at either time does not negate that fact.
Also you keep quoting your parents? Im not sure what moving from the north to south has to do with how easy or not house buying was that the time? In fact, if anything it bolsters my view that getting a large mortgage was easier then. If someone moved from the north to south now going from a 200k house to a 2mil house they would either have been given a huge increase in mortgage or saved a boat ton of money. If they saved the money then if even further sided with my argument - who on Earth now can afford to save that much alongside paying huge mortgage rates and with this bonkers cost of living right now?

My own personal view is that the following would help the situation

Far more social housing of all types - gvt bring in DiYso again (Labour did it for awhile) - shared ownership on the open market- not just new builds-

No buy to let mortgages over35% .

Ban Airbnb of whole properties (exemption for annexes on owners grounds etc) - still allow room letting s etc .

Limit holiday cottage/flats registration to a certain percentage in a given area.

Bring back self declaration mortgages for those not in PAYE at 80% - provided they have a 3 year plus of rental or mortgage payments of at least the level being applied for.

Stop right to buy totally -it's a really poor policy and I find it galling that I know people who have had their rent covered off for years and barely contributed who then have bought at huge discount either by inheritance or a family member buying it - and then being flogged off at huge profit a few years later.

If it was that easy - Then why was over half of the population in England still renting????

@DistinguishedSocialCommentator the below explains the difference quite an easy to understand way, although the article is now 2 years dated.

'Interest rates of 6.43% may seem lower than the mortgage rates of 15% which borrowers were paying in 1980 for example, but there is a critical difference: surging house prices, driven by a lack of supply and historically low interest rates since the financial crisis of 2008, and the commensurate increase in household indebtedness, mean that the 6.43% mortgage rates of today are equivalent to a rate of 25.7% in 1980 (see Editors’ notes for calculation).

In 1980, the average UK house price was around £21,000 and mortgage costs accounted for 11.3% of disposable income (see Editors’ notes).

Today, with the average 2 year fixed rate mortgage on offer to new customers currently standing at 6.43%, those figures are around £292,000 and 45.1% respectively.

Housing is now at its least affordable point since records began. The average home currently costs 9.1 times the average local wage compared to 3.5 in 1997 (Source ONS).

This particularly impacts young people. Rates of home ownership amongst 25-34 year olds have collapsed over the last 30 years. In 1996, home ownership levels for this age bracket were 65%. By 2016, the level for this age group had fallen to 27% - giving them the label of ‘generation rent’.'

www.leedsbuildingsociety.co.uk/_resources/pdfs/press-pdfs/press-releases/housing-is-now-at-its-least-affordable.pdf

I couldn't get a job where my parents lived. So I had to save what deposit I could while renting. Having done so and now I was no longer funding a landlord's pension I could over pay and get myself down to 60% within 5 years.

It will catch out those less financially literate, certainly
However my first home was a 25 year mortgage. I lived there approx 10 years, then took out another 25 year term when I upsized. So 35 years total.
if I’d moved again I would quite possibly have taken out another mortgage bringing me to above the 40 years you deem unacceptable.🤷‍♀️

@Abitofalark it's not quite that easy sadly, or we would have done it- it still seems to requirethat you have strong enough pension income still on the affordability criteria- and very few have. The fact you might say you will work till mid 70s or the fact it's likely you will inherit half a million and pay it off etc doesn't hold sway. If anyone knows a lender not working on that basis- do let me know!!

But that’s not the landlords fault.

Of course they were forced to rent. Shelter is as much a necessity as food.

Yes this. I see you are a multiple property owner OP therefore you are ‘part of the problem, not the solution’ (not my original quote but it is apt).

I bought my first house in 2002- 22 years ago. It was far far easier then.
We got an interest only mortgage with no savings. A 5% deposit. It wasn’t that hard at all. And guess what- house prices have risen so so much that now being interest only for a good few years hasn’t made much difference. We have a house double the size all because we were born at the right time to get a foot on the ladder. We couldn’t ever ever afford a house now on comparable wages.
You were also extremely fortunate to have been born at the right time. Yes you may have saved and been careful but you were born at the right time.
Don’t you forget that. Sheer luck and the fact that you can’t see that is party the reason why people trot out the term boomer so frequently.

I don’t see the connection between the issue of the right to buy a council home with a discount, and your original post about 40 year mortgages.

This thread is unbelievable. Someone smugly boasting of paying off mortgages years early and owning rental properties in the face of so many people who can't afford a mortgage or get out of paying extortionate prices in private rental. Someone else saying extending to 40 years won't do much to lower monthly payments. What? Been there and done that, so there. There's little reality or awareness in some people. It's as if it's all a plot by banks whereas the reality is that we have an economic system and circumstances in which people need to borrow and lenders need to lend.

Fortunately, nowadays you can take out longer mortgages because prices have been pushed out of reach otherwise, caused by factors of demand, supply and so on - well off 'haves' with investment buys or buys to lets are a part of it. Many lenders have extended their upper age limit for paying off a mortgage to 80 or 85 or removed an upper age limit altogether. It's even possible to take out a mortgage in retirement, subject to individual circumstances and affordability. It's good to have that flexibility because it has become a necessity for many people.

You’re treating a symptom not the disease with this approach. The prices rises are bad but just making more people rent doesn’t strike me as helping.

Yes... People owning homes they don't live in, and keeping them for profit, is what's pushing prices up, OP.

@DistinguishedSocialCommentator do you charge your renters a fair rent to allow them to save a decent amount towards a deposit? As you have no mortgage it’s pure profit apart from fees/insurance/some held back for maintenance… if you’re a good LL who actually maintains their property? Or have you used the opportunity with sky high rentals to your advantage and raised your rent? If it wasn’t for inheritance I wouldn’t have been able to afford my home as I couldn’t save for a mortgage while paying rent. My mortgage was cheaper than my rent and even with increased interest rates is still cheaper. People don’t stand a fair chance of showing savings for 2years when rents are so high, as there is very little money to spare and I don’t think from what your saying is the odd £50 each month, I couldn’t live with my parents to save as there are few job opportunities where they lived.