Gabriella Ferlita
Mortgages that are 50-years-long and would pass through generations could be introduced in the UK as a way to tackle the housing crisis.
MPs are exploring the scheme, with the idea that hopeful homeowners could build up equity rather than paying rent.
Under the plan being overlooked by Downing Street, this lengthy mortgage period would allow first-time homeowners to borrow larger sums of money with the possibility of passing the debt on should they not be able to clear it, The Guardian has reported.
However, it is not yet clear what steps the government would take in order to fulfil this idea.
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Meanwhile, mortgage experts agree that a scheme of this calibre could allow home buyers some benefits, but it could also bring the issues of piling debt onto their children and doesn’t address the issue of the current housing supply crisis.
Other housing schemes being considered for a possible roll-out by the government include freeing up council-owned land to rapidly build homes, as well as exploring whether schools and hospitals could build homes for key workers who are priced out of living in local areas where they work.
During the Nato summit in Madrid, Prime Minister Boris Johnson confirmed that these schemes were being considered and added that the government 'wants to find all sorts of creative ways to help people into ownership'.
He said at the event: “Last year 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.
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“We need young people to have the confidence, to have the deposits, the mortgage packages to be able to get into ownership. If you’re good enough to pay a lot in rent, we should find ways to help you to convert that into a mortgage.”
Reporters asked if he was considering ultra-long mortgages, to which he replied: “Yes, certainly.”
However, the plan of transferring mortgages between generations is not a new idea, having been pioneered in Japan where family mortgages of 100 years have been offered for quite a while.
Meanwhile, in the UK, relatively long mortgages are already the most common for homeowners. According to the Building Societies Association, 37 percent of first-time buyers took out mortgages of between 30 and 35 years, with only 10 percent opting for a mortgage of less than 20 years.