50-year mortgages, game changer or not?

The idea of a 50 year mortgage still baffles me and just shows how out of touch these policymakers are with real world living. Banks have spent years building a robust affordability model to try and ensure the mortgage could remain affordable for the foreseeable future. With pension provisions for many so minimal, how are we expecting the debt to be serviced when employment stops! If it passes down to their children what's to say they can even afford to cover the cost of the debt. The industry has spent years adding measures to avoid another financial meltdown and this goes against everything that has been put in place. They may as well just bring self-certification back at the same time if they want to continue with ridiculous ideas that could do more harm than good.

As always with announcements like this the devil is in the detail and there is very little detail on this. I raises more questions than answers however... I guess the biggest issue from a lenders position is how they would know that the person inheriting the mortgage can afford to continue paying the mortgage. There would have to be some sort of assessment of affordability done for this but at what stage would that happen? Would it be when the parents apply for the mortgage? What if the childs circustmances change? Maybe when the mortgage and property is passed to the child/relative they would be given the option to sell or keep the property depending on their situation? Would the lenders have a kind of break clause in this situation that would waive any early repayment charges or would someone end up paying a large fee because they can’t afford to take on the mortgage? As with most announcements from the government the devil is in the detail but also you would have to get the lenders on board with it too in order to roll it would. If the lenders consider it risky they might require some assurance from the government by way of the government underwriting the risks. We know that this model happens in Japan currently but it has been criticised for overly stimulating the market, pushing up property prices and therefore not really solving the affordability issue within the Japanese property market. My feeling is that whilst we have a supply and depend issue in this country, something like this alone won’t solve the problem but I welcome all innovation in the mortgage market that can help people buy and offer more options to people.

An idea like this would need to go through a lot of regulatory hoops and the specific details as to how it will work will determine its success. I think there is potential for it to work but I have a lot of unanswered questions around affordability, rates, tax and how it would work for the children.

More kicking the can down the road from this shambles of a government. We don't need 50 year mortgages, help to buy, stamp duty holidays, rent to buy, shared ownership or any of the other myriad schemes designed to prop up overinflated house prices. The next generation doesn't need more debt. What it needs are more houses to be built and lower house prices.

How is creating more elaborate ways of getting people into more and more debt going to fix the chronic undersupply of housing? It is not the mortgage market stopping people from buying property, it's the lack of property. Building more homes in places people want to live is how you help more people get on the property ladder, the answer is not to get the kids to pay for mum and dad's house. I have no issue with the notion of a 50-year mortgage, the term is largely irrelevant in the grand scheme of things and anything that allows more flexibility in people's financial planning is generally no bad thing, it is the idea of passing that debt onto your children that seems total madness to me. If anything, I can see that creating a further surge in property prices, making it even harder to get on the property ladder, so being totally counter-productive to the problem it is being touted as helping to fix.