Mortgages until 95yrs, will this come to the UK in the future?

[screamingj]

This is currently China's answer to their own property crisis. I can see some version of it happening here too in years to come. Why not? We're living longer and it feeds into the governments support of private housing. Whether we can actually afford it is another matter. Without thinking about it too hard it makes sense to me to extend the period you can take out a mortgage as many of us are living longer and working. What d'you think?

If lenders find a way to make money out of it and people want it, then why not.

If the alternative is renting then it’s a good idea.

As PP said, it tends to be seen as generational. So parents buy house, raise kids, when kids marry and have kids they take over and either the original owners downsize or carry on living there. It's much more common to have multiple generations living together.
It would take a big culture shift as well as a shift in banking practice to get it to work here.

That's more of an equity release thing though isn't it?
It does seem like some sort of servitude to the banks. What's happened to us as a society?
My dad worked in a factory. He bought a house in the 70s (three bedroomed bungalow) for £4500, paid off the mortgage in a few years.
Wages really haven't kept pace with inflation.

We have equity release schemes. It's similar in that the bank end up owning part of your property.

Sounds a lot renting, but if it makes you sleep at night knowing you are paying the bank triple the price of the property rather than landlord then I guess it could work. I’m sure there’ll be some stipulation of when/how it gets repossessed by the bank if you don’t survive till 95. Also this would push housing price way up, which means you’d have no chance to repay it quickly. Lifetimes project :D

Also I don’t think new coming generations are as obsessed about having a mortgage. It’s costly and doesn’t always makes sense. With current interest rates and house prices, renting is a cheaper than interest to the bank.

This is a terrible idea that would see house prices increase substantially

I guess where the one child policy means that there is likely to be just one person inheriting the property and the older generation are cared for at home it makes sense.

I wonder what % of people pay off their mortgage early? Everyone I know of a similar age has paid off theirs early, so I wouldn't envisage actually still paying it at 95 and if you did, unless you continually upgraded your house, it would be peanuts.

Most people don’t live until the age of 95 and China is very different from the UK in terms of housing. My understanding is that all / most properties are leasehold there and the government has the right to purchase property back, for example to knock down and redevelop. Not to mention the demographic differences, previous one child policy etc. I think most people in the UK aspire to be mortgage free before their income drops in retirement.

Most people would probably then downsize to a smaller/cheaper property once their DC leave home.

We don’t have the same society as China so no reason to think we will follow the same path. I will have paid off my mortgage by 60 and most of my friends have paid off their mortgages even earlier.
Most people in the U.K. can’t afford mortgages once they are retired, or pay the fees of a rental property.

People on a pension often have to pay rent, so it wouldn't make any difference.

No because most people in the UK don't live generationally. This only works with cultures where people do that eg grandparents/parents/children living in the same home which is common in many cultures

And they may receive housing benefit to cover rent. They are on their own for mortgage payments so that's a huge difference.

No, this is dystopian and property is already over inflated relative to wages.

The current situation is already hurting UK society and stifling innovation, this would make things worse. Proper balance between earned income and investment income needs to be restored. Wages need to rise and property prices need to fall rather than this constant effort to keep them propped up.

The reason it's not a good idea is because it just perpetuates the problem. when there's more people who want houses than there are houses being built, the mechanism for allocating them is by price. When you could only buy a property with a 10% deposit and could borrow 3.5x the income of one breadwinner abd pay off over 25 years, it was possible to buy a basic home for 3.5x average local salary+10%. every innovation in financial products, be it making joint incomes accepted, higher multiples or longer terms, all have the effect of pushing up prices until the new financial product becomes the default requirement to be able to afford a basic property, so you've just kicked the can down the road and the only winners are the banks.

The actual solution is to build more houses, at such a high rate that there's more homes available than there are people who need them, so that they are affordable with existing financial products.

obviously the private construction companies will never do this because it wouldn't be to their benefit. they profit more by perpetuating the existing vicious spiral. The building needs to be government-funded.

If the planning framework was changed appropriately, and restrictions placed on land banking, the increased housing supply would come. But politicians wouldn’t let this happen if it disadvantaged the volume house builders.

I can't see prices ever falling long term though because we live on an island. Land is a finite resource.

I agree about land-banking though. There is a massive parcel of land near me, immediately adjacent to the main road. It's been untouched for nearly 30yrs. I'd love to know who owns it. (big enough for half a dozen blocks of flats).

And they may receive housing benefit to cover rent. They are on their own for mortgage payments so that's a huge difference.

And for many homeowners paying off their mortgage before they retire is a major part of planning for retirement.

Of course some may, but others don't and I was talking about those people. I pay rent with no help and if I could get a mortgage I would be very happy. I'm 63, have inherited money and a super plan which I can access in 18 months (not in the UK), but I won't have quite enough money to buy - and no hope of getting a mortgage, so will be renting for the rest of my life.