Cross-generational mortgage weighed up by government

The possibility of mortgages that have terms of repayment that cross over between one generation and the next is being weighed up by the government, it has been reported.

Mortgage Strategy has reported that, according to Sky News, this is an idea that the government is floating as a way of helping younger people to get onto the housing ladder in the wake of rising house prices.

This story indicated that the plan would see older generations who already own homes apply for mortgages that have repayment terms of up to 50 years. These homes would be for their children, who in turn would pick up the repayment of the loans following the deaths of their parents. A similar idea is already fairly commonplace in Japan.

Sky News says that Boris Johnson has been asked if this is something the government is looking into and that he responded by saying that it is. The idea has emerged in the wake of news that borrowing levels for mortgages fell dramatically during April.

There was a drop of over £2 billion in the net mortgage borrowing for that month, compared with March, figures released by the Bank of England reveal. There are clear indications that younger first-time homebuyers in particular are struggling to find properties that are within their financial reach.

Mortgage advisors with CeMAP training are aware of how tough the market is for first-time buyers, although whether this proposed policy will help with that remains to be seen.


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