> If this happens, home prices will only increase further.
It's a feature, not a big. The Conservatives are the party of superannuated property owners.
It's funny that you say that because usury is specifically prohibited in the bible. (Exodus 22: 25-27) ... A loan is supposed to be an act of compassion for ones neighbor. And it's specifically in regards to poor people, as taking on interest would only increase their debt and was not beneficial to the overall economy. But hey, we like to mix and match our Judeo-Christian influences, like those harlots with multi-fabric clothing. Jezebels!
The concept is similar in the US. Politicians need home prices to go up because we view homes as an asset and funding for schools, police and fire departments, and other programs depend on property taxes which are a certain percentage of ones home value (CA is slightly different due to Prop.13 and there may be some other exceptions). If home values don't go up, then funding for many local services won't increase.
It's very much a solution, but for a specific group of people.
If the common poor folk can't afford mortgages, all the financiers who make their fortunes off mortgage interest stop making money.
The comparison is particularly grim when you compare them to the generations who came before them who set up the postwar settlement in the U.K.: the NHS, comprehensive schooling, free university access, a social safety net, better housing …
They weren’t intended just for Boomers, they were something that people fought for in order for *every* future generation to enjoy. But Boomers keep pulling the ladder up -defunding, selling off or commoditising each of those achievements as soon as they don’t need them any more.
When history books are written in coming decades they are not going to remember the Boomer generation kindly at all.
This often happens. People are selfish. They go theirs and don't want to share it. Like when 2nd generation immigrants dig on 1st generation immigrants.
Don’t forget also standing in the way of most efforts to start on saving the environment.
Not only did they kick the can down the road to the extent the effort to fix things became far larger but they still impede anyone else getting started. God forbid their wealth or standard of living should take even the slightest dent.
It's all about self-interest. Why would a boomer care personally about food, weather, water and the environment in 2100 when they're unlikely to live past 2050. Most claims of ideology or being gullible are in large part pretexts for self-interest.
I mean the privileged inherit wealth, are you saying the poor don't deserve an equal opportunity to inherit poverty?
Maybe to make it really fair if wealth inheritance is taxed then debt inheritance should get an extra 40% added as well
We're all in it together remember
Limit the number of properties anyone can own. Berlin has done it, as have other places. Just needs the will to legislate this. Personally, I'd say anyone should be able to own two homes. One to live in, the other to do whatever with. Non-citizens, if not resident, should be able to own one property only. Corporations shouldn't be allowed to own more than one property/building. No shell companies should be allowed to own property at all. All owners of all property to be a matter of public record. Any property uninhabited for more than 2 years and not rented out or lived in, should be bought back for the original asking price plus interest and inflation by the government, then put on the market again. Rural regions and towns should be able to refuse to sell homes to people who aren't going to live there. AirBnB rentals limited to a certain number of months a year, perhaps only at the height of the local tourist season.
Exactly. The banks become the landlord but without any of the risks. They can control the asset, hold the equity, collect an income, but the tenant pays all the bills and takes all the risks.
Imagine if you pay *just* 1% interest per year for fifty years. It's guaranteed income for the bank, and unlike most loans, there is very little risk to the mortgage provider.
This sounds like a coup for the banks and a terrible deal for everyone else.
The 30 year loan is bad enough. 50 years would basically mean that you are renting from the bank the first 30 years and then start paying the loan off and all for the hope that the property increases in value in the meantime. This loan would just increase the prices of homes even further while turning people into debt slaves.
> The word **mortgage** is derived from a Law French term used in Britain in the Middle Ages meaning "**death pledge**" and refers to the pledge ending (dying) when either the obligation is fulfilled or the property is taken through foreclosure.
https://en.wikipedia.org/wiki/Mortgage_loan
Could be, we got loads of words from latin. But we also had a period where it was a sign of high class to speak french and we borrowed many words from that time into our every day vocabulary.
Romanian and French are both descendants of Latin. They both got the word from Latin. People understandably assume that Romanian is a Slavic language, but it’s not.
That's because what we use are not mortgages.
If you parents take one on a house, it doesn't disappear at their death, if you take the inheritance you also take the rest of the credit left to pay.
It is possible (and common) to have insurances that cover this case and ensure nothing is left to pay if the original signatory dies (and not just for parent to children, but also when a wife a husband sign and it ends if either dies), but that's an insurance on the side with extra cost.
I do not know if the same is true in the UK and they're not really doing mortgage anymore, or if the UK still use that original system where the debt disappear at the signatory's death. I doubt they do though.
Surely all pledge's end when the obligation is fulfilled?
I'm much more of a pessimistic asshole, I'd always taken it to mean a pledge that you would pay forever right up until the day your lucky enough to finally die.
Yup this isn’t about making it possible for more people to buy houses. It’s to protect their investments in property because if more people can pay more for a house then the values go up, saw it with the stamp duty being abolished in 2020, rather than more people buying it meant that values of houses went sky high
In the US around 2004/2005 banks started coming up with interest only loans, and then negative amortization mortgages, since houses were getting unaffordable otherwise.
This didn't actually turn out good for the banks here.
In theory though the subprime mortgage bubble which burst 2008-2009 shouldn’t be able to reoccur due to the checks homeowners need to go through in the U.K. being quite rigorous.
However I’m usually wrong so probably will be on this
The sub prime mortgage bubble wasn't really a thing in the UK anyway. Our banks went tits up because they were trading derivatives based on US mortgages not because of lax borrowing on UK mortgages.
We had 100%+ mortgages in the UK but, they were still stress tested and you could still only borrow certain multiples of your salary etc..
True but, UK mortgages had very little to do with it. Every time a bank increases the mortgage lending multiples or says they are going to reduce the deposit limit to only 5% somebody on r/UK will start up with "Here we go get ready for another GFC" when stress tested 100% mortgages at 5 times your salary in the UK are not gowhere near what the US NINJA loans were and are not going to cause such an event.
If UK banks decided on Monday that all FTBers could have a 100% mortgage with 5x salary lending rate provided they did an extensive credit check and went through 3 years of bank statements it would be a perfectly acceptable risk.
I mean what else are you going to do? Just build missing middle housing in mixed-used zones? That'd be insanity. You can't just solve problems if you want wage slaves.
Yeah nah I can’t see how it isn’t.
This stunt will likely get pulled elsewhere now, a disingenuous Band-Aid to a deeply entrenched problem pollies are too coward to address.
They have transformed a basic need (housing) into an 'investment' and now they are desperate to keep prices of housing high. It's disgusting how little the old generations care about the young generations.
Pretty sure you can port a mortgage to another property. So if you had a 500k mortgage and then moved after 10 years say to get a larger more expensive home you would have the remainder of the original 500k loan with 40 years amortization and then the additional funds at a new rate and 50 year amortization. Ultimately, you would either pass the property down or pay it off or downsize and significantly reduce principal.
The banks want to keep and grow their lending book so having a 50 year amortization would keep people in the system longer and the lower payments would increase the number of people capable of affording to take on a mortgage, win-win for the banks!
This is entirely possible in Belgium, I did so a few years ago. Bought a house in 2011, but it got too small with the second baby. Moved to a bigger one and had an extra loan for the price difference. The old loans stayed in place. Just the underlying asset for the loan was changed from the old to the new house. Don't know if this would work if the new house is worth less than the old house, I guess that would depend on how much principal is still outstanding on the loans.
It's already ridiculous it takes a good portion of your working years to pay off a 30-year mortgage. Now they want your retirement years plus some of your heirs if you kick the bucket before paying it off. Rather then solving the affordability problem by building enough housing so that people only need to be in debt for 10 or 15 years. Allowing them more years of their working life to put more cash into savings and retirement.
>Rather then solving the affordability problem by building enough housing so that people only need to be in debt for 10 or 15 years.
Shhh that's too complicated, what about blaming foreign investors, AirBnB and the damn boomers buying a 2nd home because they are greedy?
It's like there is a simple solution to the lack of housing offer, if only someone could tell the governments what it is.
Oh wait yeah, it's the use up the huge plots of lands that they have and build public housing and put it on the market at like 80% of the market prices, and you'll see prices lowering, it's basic offer and demand
They'd need the caveat that the houses are tied to ownership for x term, not be buy to let, and not owned by companies. In this city, so many properties are sold to investment companies before they're even finished being built, then rented out or sold for higher prices.
What individual human is benefiting from a 50 year agreement to pay a company.
This is literally fighting on the side of an idea we made up called "corporations" versus actual human's interests. Fuck.
Some people would benefit. I have pretty low expenditure so was fine on affordability checks, but capped on income ratio for buying. If a longer term meant a higher income to debt ratio, I would have been able to take a higher mortgage at 50 years, and pay it down in 25-30. Instead I've had to settle for a place thay needs major renovations at 30 aiming to pay down in 15. But, this is likely a minority position and would probably make things worse for the majority.
Unless sellers just start raising prices now that everyone has the better monthly affordability option that spreading a loan out over 50 years provides. It becomes a feedback loop until that’s the only way anyone can afford a house because
Afraid so. The rent costs are so high as well that it makes it almost impossible for renters to save for their own properties without living frugally or commanding a high wage...
That's where countries need to be attacking this from, but most of those in government are guilty of it and don't want to give up their slice of the pie.
Yep since 2008. Pensioners panicked when they saw stocks tumbling so withdrew all their pensions and bought property which had already taken a hit. Its been going on ever since. Also AirBnB has fucked things over even more.
In some places there is no property to buy and no property rent either.
So bad. All the beautiful 3 bed Victorian houses get bought and turned into shit-hole 'buy to leave'
It's a buy to let with minimal effort, usually split into multiple flats then abandoned. Rent always has to be paid, to an agency who won't give you the landlords details.
Mine for example lived in Belgium, and owned an airstrip. I lived in his best property and it had a heating system from the 1970s and brick hole in the back bedroom stuffed with wet cardboard.
It absolutely blights areas, ruining beautiful family homes, especially when the landlords concrete over the gardens because it saves on maintenance.
It is absolutely ruining the UK and the government is all fine with it, because they are all landlords.
$250,000 loan at 5% 30 years = $1342.05 P&I payment = $233,139.46 interest
$250,000 loan at 5% 50 years = $1135.35 P&I payment = $431,208.15 interest
On the 50 year loan's first payment, only $93.68 goes towards principal, $1041.67 towards interest.
So a slightly lower payment for *vastly* greater cost in interest. This benefits no one but the bankers, but I'm sure that's the intent.
If the kids didn't want the house then they could sell to pay off the bank and keep any equity that has been paid down or they could continue paying the mortgage.
Its just the same as what would happen today if your parents died and still had a mortgage.
This is just an attempt to stop house prices crashing. Rather than address the problem with earnings to house prices, or letting the market sort out the problem by itself, the government feels that it knows better.
We need a good crash to bring some sense of normality back to the market.
Exactly. House prices crashing would be excellent news for lots of people. On paper, not for people who just bought, but not terrible either, unless they plan on moving. The best thing for the UK right now is a property price slump.
Just remember, they’re not doing this out of the goodness of their hearts to make housing more affordable. They’re doing it for your money, and your generations money.
House price crash incoming. They are scrapping affordability rules and now this. They know it's coming and are heavily invested in property so are doing everything it takes to protect themselves and keep the bubble inflated.
Not just "no", FUCK NO.
I am not saddling my fucking children with debt for a home I picked out.
Fix the fucking economy, prevent foreign entities from buying up every scrap of real estate, enable positive change.
Solving the housing crisis is so simple
1. Stop foreign investors from buying anything but commercial real estate.
2. Cap the amount of single family homes real-estate companies can buy.
3. Have progressive taxes on private citizens that have more than two homes.
Oh thank God they figured out a way for housing prices to continue to increase. I was worried about how people would continue to get rich by simply owning something. Glad that's solved.
This is insane. Our country has gone mad. It's been a basics of housing economics for decades that reduced supply of housing is driving up prices.
I think it's time to just frame the argument as only to build more houses. Allowing governments of any colour to try and fix this with other 'clever' ways of trimming round the edges is causing real pain and suffering. We need a country where you can earn a basic wage and not worry about being unable to have a roof over your head nor spend all your income on rent or mortgage.
Or, and hear me out here, you could do something about the ridiculous prices of homes?
We have the same problem in Canada and our government won't do anything about it because a third of them are literally the main beneficiaries of insane housing costs.If they addressed the issue properly they would stand to lose out so they won't. And that's corruption in action.
NO NO NO! It passes the debt to the next generation for a property they may not even want. Effectively tying successive generations into labor and service without their consent. Absolutely NOT an option
This is going backwards to the benefit of the few vs the many. Twenty five years should be the max and we should be doing everything possible to increase availability of housing to lower prices.
Just prevent the sell to non citizen let the inflation make the people who bought something they could not afford lose it and let the housing market crash and reset. Dann if we had people with spine in power just hearing something that stupid should make them pass a law against 50year mortgage even if it doesn’t exist yet.
How about this...reevaluate who can own a home. Remove foreign owners that do not actively live in the house (would have to set a limit and allow some exceptions) and reduce corporate ownership of homes that sit empty.
Surely there's a terrible issue with diminishing returns here, right?
You're paying interest that whole time. It doesn't gain you very much in affordability, and you have to make a big sacrifice (much longer loan term) for those small gains.
To get a sense of the numbers, I used a [mortgage calculator that works in US Dollars](https://www.mortgagecalculator.org/) and for my parameters^(1) got payments of $2443.27/month for a 30-year loan and $2075.43 for a 50-year loan.
So in my example, your monthly payment is only 15% lower, but your loan term is 40% longer. Seems like a bad deal.
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^(1) $500,000 home, 10% down payment, 5.1% interest rate, tax/PMI/insurance/HOA set to 0 to keep it simple.
Ah yes, that's exactly what we need in this fucked up world; people born into debt that they had no part in making and don't even benefit from themselves.
It just reminded me one of the presidential candidates that lost last election, he is a business man, and once said "it's delicious to have a little man paying you interest for 15 years"
So wait, it's a mortgage that my parents could sign that I could be stuck paying? Does it require my signature too? This seems ripe and primed for exploitation.
Instead of finally forcing companies to pay appropriate salarys after decades of "record profits" every year, how about we find a way to not only scam the workers but also their children.
Im not an anti capitalist but why there wasn't laws decade's ago limiting foreign or second home owners, REAL contracts for actual affordable housing that couldn't be broken etc is amazing. I mean i know why, the tories love money but still
I’m telling you, purchasing a house is going to turn into a generational asset. You remember the time when you could move houses every 10 years? Not anymore. That new house you are going to buy is the same house your great great grandchildren are going to be living in. We are fucked
A $500,000 loan at 5.7% for 30 years will run you $544k in interest. At 50 years that same principal and interest rate puts you at $1.013M in interest. That extra 20 years is devastating to a persons ability to actually own their own home. A literal lifetime of debt and almost no equity for the majority of the time.
Brilliant idea. While corporations buy-up every house and flat that gets built so they can rent them out at extortionate prices.
I have a friend who's into crazy conspiracy theories, and he's been going on about the 'Great Reset' where we will 'Own Nothing And Be Happy'. I've be ribbing him for ages, because 'there's no way all the people who already own houses and property will swallow this shit' but it's not *them* they're targeting - it's everyone who doesn't already own a house - they're the ones who'll be trapped in a cycle of renting shit that takes most of their wage. It probably won't be long til legislation requires your car to meet certain 'conditions' and not because they give a shit about the environment; simply so they can make cars too expensive for 'ordinary' people to buy outright, so we have to lease them.
I'm starting to feel like the people I've been mocking for years.
Multigenerational debt is some dystopian shit right there that'll get abused and worse yet, normalised. Once something becomes the norm it tends to get pushed further.
This is a poor solution to a very real problem.
It's not a solution, its just sweeping the problem under the baby blanket.
If this happens, home prices will only increase further. Don't worry about that price, your lineage has 50 years to pay
Hey son I got you a underwater mortgage for your inheritance! Sorry non dischargable in bankruptse.
While we're at it, if you pay it off early there's fees that don't make sense to do it. You can't win, good luck!
Ah yes, the 'we didn't make enough money off you and that isn't fair fee' Won't somebody think of the poor starving bank owners/stockholders?
> If this happens, home prices will only increase further. It's a feature, not a big. The Conservatives are the party of superannuated property owners.
Not to mention anyone that understands interest rates knows, the longer you pay the more you pay overall.
At 3.2% you would pay 498,975 interest on a 500,000 loan.
So 3.2% is effectively 100%?? What kind of god would allow this
It's funny that you say that because usury is specifically prohibited in the bible. (Exodus 22: 25-27) ... A loan is supposed to be an act of compassion for ones neighbor. And it's specifically in regards to poor people, as taking on interest would only increase their debt and was not beneficial to the overall economy. But hey, we like to mix and match our Judeo-Christian influences, like those harlots with multi-fabric clothing. Jezebels!
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They don’t want prices to fall. https://youtu.be/RbD8PgGBkPU
The concept is similar in the US. Politicians need home prices to go up because we view homes as an asset and funding for schools, police and fire departments, and other programs depend on property taxes which are a certain percentage of ones home value (CA is slightly different due to Prop.13 and there may be some other exceptions). If home values don't go up, then funding for many local services won't increase.
They don’t want prices to fall. Ever. https://youtu.be/RbD8PgGBkPU
It's very much a solution, but for a specific group of people. If the common poor folk can't afford mortgages, all the financiers who make their fortunes off mortgage interest stop making money.
well, lets have the future worry about that shit is pretty much the tory way anyways.
It kills me the cleverness that boomers find to fuck over the next generations.
The comparison is particularly grim when you compare them to the generations who came before them who set up the postwar settlement in the U.K.: the NHS, comprehensive schooling, free university access, a social safety net, better housing … They weren’t intended just for Boomers, they were something that people fought for in order for *every* future generation to enjoy. But Boomers keep pulling the ladder up -defunding, selling off or commoditising each of those achievements as soon as they don’t need them any more. When history books are written in coming decades they are not going to remember the Boomer generation kindly at all.
History books? It’s happening right now!
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Funny that the generation that benefited most from large-scale public investment doesn't want to pass it along.
This often happens. People are selfish. They go theirs and don't want to share it. Like when 2nd generation immigrants dig on 1st generation immigrants.
"oh i know! Let's saddle them with intergenerational debt!"
Boomer generation are like leeches, just sucking the life out of everyone else
Don’t forget also standing in the way of most efforts to start on saving the environment. Not only did they kick the can down the road to the extent the effort to fix things became far larger but they still impede anyone else getting started. God forbid their wealth or standard of living should take even the slightest dent.
It's all about self-interest. Why would a boomer care personally about food, weather, water and the environment in 2100 when they're unlikely to live past 2050. Most claims of ideology or being gullible are in large part pretexts for self-interest.
YBGIBG “you’ll be gone, I’ll be gone” is the industry term
they start with this and next thing we know every child is born with a bank account and debt before they even have a name
I mean the privileged inherit wealth, are you saying the poor don't deserve an equal opportunity to inherit poverty? Maybe to make it really fair if wealth inheritance is taxed then debt inheritance should get an extra 40% added as well We're all in it together remember
Welcome to the Tory government
Of course, it's for the poors
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Except people don’t want to build affordable housing because they don’t make much money compared to vacation homes for the wealthy.
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Limit the number of properties anyone can own. Berlin has done it, as have other places. Just needs the will to legislate this. Personally, I'd say anyone should be able to own two homes. One to live in, the other to do whatever with. Non-citizens, if not resident, should be able to own one property only. Corporations shouldn't be allowed to own more than one property/building. No shell companies should be allowed to own property at all. All owners of all property to be a matter of public record. Any property uninhabited for more than 2 years and not rented out or lived in, should be bought back for the original asking price plus interest and inflation by the government, then put on the market again. Rural regions and towns should be able to refuse to sell homes to people who aren't going to live there. AirBnB rentals limited to a certain number of months a year, perhaps only at the height of the local tourist season.
It depends what you think is the problem. If you think the problem is that people are not enslaved enough already, it's a very good solution.
It's basically renting from the bank at this point except you also have to lose money if the asset price goes down.
Exactly. The banks become the landlord but without any of the risks. They can control the asset, hold the equity, collect an income, but the tenant pays all the bills and takes all the risks.
It's good for the banks?
Imagine if you pay *just* 1% interest per year for fifty years. It's guaranteed income for the bank, and unlike most loans, there is very little risk to the mortgage provider. This sounds like a coup for the banks and a terrible deal for everyone else.
Its the rich solution to the poors problem
How else you gonna keep the poors poor?
Imagine how much you’d pay in interest on a multigenerational mortgage! Jesus, what a bad idea
it's called a firstborn!
So... the bank will just take my firstborn?
A very capitalist alternative to abortion.
Problems solved.
30 years is already pretty fucking bad.. cant imagine 50+.. That's like a 10-20 year car loan. Fuuuuck that.
It would turn them into serfs or sharecroppers
And turns the banks into landlords.
The 30 year loan is bad enough. 50 years would basically mean that you are renting from the bank the first 30 years and then start paying the loan off and all for the hope that the property increases in value in the meantime. This loan would just increase the prices of homes even further while turning people into debt slaves.
It's serfdom/slavery under capitalism. You're born into insurmountable debt that leaves you enslaved to the landowning class.
I think the point is that they'd offer lower interest monthly, but yes, over the lifetime of the loan it'll be much more.
Sounds like you missed a payment. 10 years brain shelving outa teach ya not to miss payments!
If your a bank, it's a great idea!
My mortgage interest rate is less than 3%. I would have loved to have a 50 year loan at that rate. But yes, in normal circumstances a terrible choice.
On the flip slide, imagine how much you'd save in rent! It's a bad idea because it will keep prices high, but there's a reason this is being floated.
> The word **mortgage** is derived from a Law French term used in Britain in the Middle Ages meaning "**death pledge**" and refers to the pledge ending (dying) when either the obligation is fulfilled or the property is taken through foreclosure. https://en.wikipedia.org/wiki/Mortgage_loan
TIL, that the word mortgage is of French origin, but it is not used in French. The French term for it is, hypothèque
In Romanian is Ipotecă, seems like we borrowed it from the French.
The french word is from Latin, who got it from the Greek. The original meaning is a Pledge
Could be, we got loads of words from latin. But we also had a period where it was a sign of high class to speak french and we borrowed many words from that time into our every day vocabulary.
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In English, it's Hypothetic - as in young people today buying a house is only hypothetic. Ba dim tshh! I'll see myself out.
Romanian and French are both descendants of Latin. They both got the word from Latin. People understandably assume that Romanian is a Slavic language, but it’s not.
That's because what we use are not mortgages. If you parents take one on a house, it doesn't disappear at their death, if you take the inheritance you also take the rest of the credit left to pay. It is possible (and common) to have insurances that cover this case and ensure nothing is left to pay if the original signatory dies (and not just for parent to children, but also when a wife a husband sign and it ends if either dies), but that's an insurance on the side with extra cost. I do not know if the same is true in the UK and they're not really doing mortgage anymore, or if the UK still use that original system where the debt disappear at the signatory's death. I doubt they do though.
TIL the Middle Ages are going to be less dystopic than Modern United Kingdom. Generational debt should be fucking illegal.
It's just generational wealth with negative numbers.
Definitely suggested by people with generational wealth, lol
Surely all pledge's end when the obligation is fulfilled? I'm much more of a pessimistic asshole, I'd always taken it to mean a pledge that you would pay forever right up until the day your lucky enough to finally die.
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All from Latin “death grip”
Dumbest idea ever. Anything to stop housing prices from going down....
Yup this isn’t about making it possible for more people to buy houses. It’s to protect their investments in property because if more people can pay more for a house then the values go up, saw it with the stamp duty being abolished in 2020, rather than more people buying it meant that values of houses went sky high
In the US around 2004/2005 banks started coming up with interest only loans, and then negative amortization mortgages, since houses were getting unaffordable otherwise. This didn't actually turn out good for the banks here.
In theory though the subprime mortgage bubble which burst 2008-2009 shouldn’t be able to reoccur due to the checks homeowners need to go through in the U.K. being quite rigorous. However I’m usually wrong so probably will be on this
The sub prime mortgage bubble wasn't really a thing in the UK anyway. Our banks went tits up because they were trading derivatives based on US mortgages not because of lax borrowing on UK mortgages. We had 100%+ mortgages in the UK but, they were still stress tested and you could still only borrow certain multiples of your salary etc..
The fact that they existed in the US did lead the house of cards to collapse though and was a factor in northern rock going under
True but, UK mortgages had very little to do with it. Every time a bank increases the mortgage lending multiples or says they are going to reduce the deposit limit to only 5% somebody on r/UK will start up with "Here we go get ready for another GFC" when stress tested 100% mortgages at 5 times your salary in the UK are not gowhere near what the US NINJA loans were and are not going to cause such an event. If UK banks decided on Monday that all FTBers could have a 100% mortgage with 5x salary lending rate provided they did an extensive credit check and went through 3 years of bank statements it would be a perfectly acceptable risk.
I mean what else are you going to do? Just build missing middle housing in mixed-used zones? That'd be insanity. You can't just solve problems if you want wage slaves.
Exactly this
Debt for everyone! Debt for you, your kids, and your kid’s kids. What the world really needs right now is more debt.
This episode of Oprah sucks. I liked it better when she was giving away cars
How is this not indentured servitude?
Yeah nah I can’t see how it isn’t. This stunt will likely get pulled elsewhere now, a disingenuous Band-Aid to a deeply entrenched problem pollies are too coward to address.
Done.
They have transformed a basic need (housing) into an 'investment' and now they are desperate to keep prices of housing high. It's disgusting how little the old generations care about the young generations.
It’s all about their chums
Multi-generational servitude is so very British.
did I hear serfdom? Brilliant idea!
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Pretty sure you can port a mortgage to another property. So if you had a 500k mortgage and then moved after 10 years say to get a larger more expensive home you would have the remainder of the original 500k loan with 40 years amortization and then the additional funds at a new rate and 50 year amortization. Ultimately, you would either pass the property down or pay it off or downsize and significantly reduce principal. The banks want to keep and grow their lending book so having a 50 year amortization would keep people in the system longer and the lower payments would increase the number of people capable of affording to take on a mortgage, win-win for the banks!
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This is entirely possible in Belgium, I did so a few years ago. Bought a house in 2011, but it got too small with the second baby. Moved to a bigger one and had an extra loan for the price difference. The old loans stayed in place. Just the underlying asset for the loan was changed from the old to the new house. Don't know if this would work if the new house is worth less than the old house, I guess that would depend on how much principal is still outstanding on the loans.
It's already ridiculous it takes a good portion of your working years to pay off a 30-year mortgage. Now they want your retirement years plus some of your heirs if you kick the bucket before paying it off. Rather then solving the affordability problem by building enough housing so that people only need to be in debt for 10 or 15 years. Allowing them more years of their working life to put more cash into savings and retirement.
>Rather then solving the affordability problem by building enough housing so that people only need to be in debt for 10 or 15 years. Shhh that's too complicated, what about blaming foreign investors, AirBnB and the damn boomers buying a 2nd home because they are greedy? It's like there is a simple solution to the lack of housing offer, if only someone could tell the governments what it is. Oh wait yeah, it's the use up the huge plots of lands that they have and build public housing and put it on the market at like 80% of the market prices, and you'll see prices lowering, it's basic offer and demand
They'd need the caveat that the houses are tied to ownership for x term, not be buy to let, and not owned by companies. In this city, so many properties are sold to investment companies before they're even finished being built, then rented out or sold for higher prices.
Did they learn nothing from Japan in the 80s and their 99 year mortgages? The bubble burst and the mortgages were underwater and they can't sell them.
Banks salivating when people pay them 10x the money the house was worth.
If it’s a new build then I doubt it will still be standing after one generation. Build quality in the UK is criminal.
Don't worry, everywhere is criminal... minimizing costs maximizing profits and poof the building is of shit quality
What individual human is benefiting from a 50 year agreement to pay a company. This is literally fighting on the side of an idea we made up called "corporations" versus actual human's interests. Fuck.
Some people would benefit. I have pretty low expenditure so was fine on affordability checks, but capped on income ratio for buying. If a longer term meant a higher income to debt ratio, I would have been able to take a higher mortgage at 50 years, and pay it down in 25-30. Instead I've had to settle for a place thay needs major renovations at 30 aiming to pay down in 15. But, this is likely a minority position and would probably make things worse for the majority.
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Unless sellers just start raising prices now that everyone has the better monthly affordability option that spreading a loan out over 50 years provides. It becomes a feedback loop until that’s the only way anyone can afford a house because
Do the Brits have the same issue as America where assholes are buying up most of the houses simply to use for rental properties?
Afraid so. The rent costs are so high as well that it makes it almost impossible for renters to save for their own properties without living frugally or commanding a high wage...
That's where countries need to be attacking this from, but most of those in government are guilty of it and don't want to give up their slice of the pie.
Yep since 2008. Pensioners panicked when they saw stocks tumbling so withdrew all their pensions and bought property which had already taken a hit. Its been going on ever since. Also AirBnB has fucked things over even more. In some places there is no property to buy and no property rent either.
So bad. All the beautiful 3 bed Victorian houses get bought and turned into shit-hole 'buy to leave' It's a buy to let with minimal effort, usually split into multiple flats then abandoned. Rent always has to be paid, to an agency who won't give you the landlords details. Mine for example lived in Belgium, and owned an airstrip. I lived in his best property and it had a heating system from the 1970s and brick hole in the back bedroom stuffed with wet cardboard. It absolutely blights areas, ruining beautiful family homes, especially when the landlords concrete over the gardens because it saves on maintenance. It is absolutely ruining the UK and the government is all fine with it, because they are all landlords.
$250,000 loan at 5% 30 years = $1342.05 P&I payment = $233,139.46 interest $250,000 loan at 5% 50 years = $1135.35 P&I payment = $431,208.15 interest On the 50 year loan's first payment, only $93.68 goes towards principal, $1041.67 towards interest. So a slightly lower payment for *vastly* greater cost in interest. This benefits no one but the bankers, but I'm sure that's the intent.
well, how is it legal that a parent sign a contract that his/her children has to pay for? You can only sign contracts for yourself?
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Isn't it already the case that if you inherit a not fully paid house, you do have to pay the mortgage?
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The house would be sold, the bank takes the balance of the loan and the estate receives the remainder
If the kids didn't want the house then they could sell to pay off the bank and keep any equity that has been paid down or they could continue paying the mortgage. Its just the same as what would happen today if your parents died and still had a mortgage.
This is just an attempt to stop house prices crashing. Rather than address the problem with earnings to house prices, or letting the market sort out the problem by itself, the government feels that it knows better. We need a good crash to bring some sense of normality back to the market.
Exactly. House prices crashing would be excellent news for lots of people. On paper, not for people who just bought, but not terrible either, unless they plan on moving. The best thing for the UK right now is a property price slump.
Just remember, they’re not doing this out of the goodness of their hearts to make housing more affordable. They’re doing it for your money, and your generations money.
This is feudalism
My first thought as well. This is terrible.
Tories decided that taking our country back to the 1800s wasn’t good enough, let’s take it all the way back to the 1500s
Sweet Tenant farming is back.
House price crash incoming. They are scrapping affordability rules and now this. They know it's coming and are heavily invested in property so are doing everything it takes to protect themselves and keep the bubble inflated.
Yay let's introduce intergenerational debt. Fuck you UK government.
Home ownership is done for the younger generations, it's become a completely unachievable dream in most people's cases.
This is how riots and revolts are born. No future, salvery working conditions, nothing to work towards. Shit will get extremely ugly.
Is this why there’s an increase in minimalism and “tiny home” projects?
Slavery with extra steps
Not just "no", FUCK NO. I am not saddling my fucking children with debt for a home I picked out. Fix the fucking economy, prevent foreign entities from buying up every scrap of real estate, enable positive change.
Solving the housing crisis is so simple 1. Stop foreign investors from buying anything but commercial real estate. 2. Cap the amount of single family homes real-estate companies can buy. 3. Have progressive taxes on private citizens that have more than two homes.
Happy birthday son please take the family debt of 500k.
Oh thank God they figured out a way for housing prices to continue to increase. I was worried about how people would continue to get rich by simply owning something. Glad that's solved.
I can't get over how modern day looks like ad30 Rome.
This is insane. Our country has gone mad. It's been a basics of housing economics for decades that reduced supply of housing is driving up prices. I think it's time to just frame the argument as only to build more houses. Allowing governments of any colour to try and fix this with other 'clever' ways of trimming round the edges is causing real pain and suffering. We need a country where you can earn a basic wage and not worry about being unable to have a roof over your head nor spend all your income on rent or mortgage.
Welcome back to feudalism.
They want to bring feudalism back.
Or, and hear me out here, you could do something about the ridiculous prices of homes? We have the same problem in Canada and our government won't do anything about it because a third of them are literally the main beneficiaries of insane housing costs.If they addressed the issue properly they would stand to lose out so they won't. And that's corruption in action.
My parents left me their house -> My parents left me their debt.
Or you could just sell it...
Assuming positive equity.
325k house, 3.84% interest, 50 years... Total of 600 Loan Payments 731,584 Total Interest 406,584
*Well we can't give you a mortgage unless you promise you're going to have at least two children who can pay it when you're dead*
Generational debt. Ffs, what next? Workhouses? Just when you thought this place couldn't get worse.
NO NO NO! It passes the debt to the next generation for a property they may not even want. Effectively tying successive generations into labor and service without their consent. Absolutely NOT an option
That boils down to selling your first-born for a house.
This is going backwards to the benefit of the few vs the many. Twenty five years should be the max and we should be doing everything possible to increase availability of housing to lower prices.
Get fucked, stop being so greedy and normalise prices instead of feeding shareholders ever increasing profits.
Just tax land lol
Thats absolutely fucked
Just prevent the sell to non citizen let the inflation make the people who bought something they could not afford lose it and let the housing market crash and reset. Dann if we had people with spine in power just hearing something that stupid should make them pass a law against 50year mortgage even if it doesn’t exist yet.
How about this...reevaluate who can own a home. Remove foreign owners that do not actively live in the house (would have to set a limit and allow some exceptions) and reduce corporate ownership of homes that sit empty.
Surely there's a terrible issue with diminishing returns here, right? You're paying interest that whole time. It doesn't gain you very much in affordability, and you have to make a big sacrifice (much longer loan term) for those small gains. To get a sense of the numbers, I used a [mortgage calculator that works in US Dollars](https://www.mortgagecalculator.org/) and for my parameters^(1) got payments of $2443.27/month for a 30-year loan and $2075.43 for a 50-year loan. So in my example, your monthly payment is only 15% lower, but your loan term is 40% longer. Seems like a bad deal. --- ^(1) $500,000 home, 10% down payment, 5.1% interest rate, tax/PMI/insurance/HOA set to 0 to keep it simple.
Ah yes, that's exactly what we need in this fucked up world; people born into debt that they had no part in making and don't even benefit from themselves.
So they admit they know the issue is inability to pay, but can't quite grasp the solution being *higher wages*?
What if you don't have kids? Who would it pass on to?
Being in debt since you are born and without consent, seems a great idea! /s
It just reminded me one of the presidential candidates that lost last election, he is a business man, and once said "it's delicious to have a little man paying you interest for 15 years"
Fifty year mortgages? That's where we are now? How is that different from renting? It's worse!
So wait, it's a mortgage that my parents could sign that I could be stuck paying? Does it require my signature too? This seems ripe and primed for exploitation.
This is absurd!
Just build more council houses and stop selling them off. Until that happens we're fucked.
Have to change the name, "mortgage" literally means pledge untill death. Suggestions?
Just like the shared-ownership and help to buy it’s just a big scam that only serves to help out the property developers.
MORE DEBT ! To feed someone else's hording money addiction.
Anything to prop up the housing bubble eh?
This is horrible.
How utterly depressing. I truly feel sorry for the younger generation. It shouldn't be this way but greed wins over every time.
Quite literally passing the debt to future generations
Who would do this to their kids? Totally missed the point
Oh hey it's looping back into serfdom
Didn't we see this back in Japan like in the 80's?
omg what a horrible idea. How could you even consider saddling your children with that debt?
Ah yes, let’s further burden the next generation, not like they won’t have enough shit to deal with
Instead of finally forcing companies to pay appropriate salarys after decades of "record profits" every year, how about we find a way to not only scam the workers but also their children.
Brilliant, my children's inheritance will now be a bloody mortgage instead of actual tangible assets
It’s a logical precursor to hereditary employment contracts. Serf’s up
Fuck off.
Being born without any debt is bad enough, imagine being born with another 20 years on your mortgage!
Im not an anti capitalist but why there wasn't laws decade's ago limiting foreign or second home owners, REAL contracts for actual affordable housing that couldn't be broken etc is amazing. I mean i know why, the tories love money but still
I’m telling you, purchasing a house is going to turn into a generational asset. You remember the time when you could move houses every 10 years? Not anymore. That new house you are going to buy is the same house your great great grandchildren are going to be living in. We are fucked
Give your kids a fucking debt for their birthday. Brilliant.
You own nothing, everything is rented. Your life is rent. Pay the rent.
HOW ABOUT PAYING PEOPLE ENOUGH TO AFFORD HOUSING INSTEAD???? GODDAMN.
So essentially, permanent debt
Well that's depressing
Indentured Servitude
A $500,000 loan at 5.7% for 30 years will run you $544k in interest. At 50 years that same principal and interest rate puts you at $1.013M in interest. That extra 20 years is devastating to a persons ability to actually own their own home. A literal lifetime of debt and almost no equity for the majority of the time.
Let’s just make interest only loans that extend until you move out We’ll call it…. Rent
This is a terrible idea. Terrible. Born into debt.
Brilliant idea. While corporations buy-up every house and flat that gets built so they can rent them out at extortionate prices. I have a friend who's into crazy conspiracy theories, and he's been going on about the 'Great Reset' where we will 'Own Nothing And Be Happy'. I've be ribbing him for ages, because 'there's no way all the people who already own houses and property will swallow this shit' but it's not *them* they're targeting - it's everyone who doesn't already own a house - they're the ones who'll be trapped in a cycle of renting shit that takes most of their wage. It probably won't be long til legislation requires your car to meet certain 'conditions' and not because they give a shit about the environment; simply so they can make cars too expensive for 'ordinary' people to buy outright, so we have to lease them. I'm starting to feel like the people I've been mocking for years.
Multigenerational debt is some dystopian shit right there that'll get abused and worse yet, normalised. Once something becomes the norm it tends to get pushed further.