Multigeneration 50 year mortgage .... Again

[Wight Flight]

8 minutes ago, Axeman123 said:

The issue then is what about retirement? A 25yr IO mortgage has the obvious shit or get off the pot trigger of the term ending, to force sale or remortgage etc. How resistant would the public be to seeing evictions of people at retirement that "paid every payment until now" and "have years left on the term" just because they asked to take a payment holiday? I know this is the bankers' dream of perpetual interest and never forming capital for the plebs, but it all seems to hang on ever advancing capital values. It seems circular to prop prices with a scheme that depends on them rising to begin with.

Who knows in this circus multiverse country though...

You can take a normal mortgage past retirement now.

 

[Axeman123]

16 minutes ago, Wight Flight said:

You can take a normal mortgage past retirement now.

Repayment only though, hence the balance outstanding towards the end will be a fraction of the purchase price.

[BWW]

It seems to be one of the societal changes that happened over my parents lifetime that people stress about providing an inheritance to their kids.

Its a load of wank IMO.

After giving kids wherewithall in terms of education and upbringing to make their way in the world, why do you need to provide an inheritance?

In most cases they wont get it until the children are pensioners too. I know someone who left last few years saved pension to his great grandkids who got it around age 18-20 and pissed it up the wall double quick time. gaming etc. Whats the point.

I also know someone who has paid ca 200k each for two grandkids and their mum so they each have a fully paid for house. He recently needed someone to sit with his wife whilst he was in hospital. all three of them refused / were difficult about it. i found it very hard not to point out most people spend a day or two working every week of the year to pay for the house he gave them the cash to buy. I see the point ... he wanted to see his descendants taken care of. But question the wisdom when the quud pro quo is the treatment he gets.

[Wight Flight]

7 minutes ago, Axeman123 said:

Repayment only though, hence the balance outstanding towards the end will be a fraction of the purchase price.

Yes. But a 25 year mortgage taken at 50 will actually have less equity at retirement age than a 50 year mortgage taken at 25.

They really don't care about repayment as it is asset backed. We would still be lending like it was 1980 if it wasn't for regulations.

[Axeman123]

23 minutes ago, BWW said:

After giving kids wherewithall in terms of education and upbringing to make their way in the world, why do you need to provide an inheritance?

All valid points.

I am sure anyone that anyone that saw their piers leap ahead of them with an inheritance would wish they had had the same opportunities, and start planning.

Once upon a time making sure your kids were polite and clean was the best a parent could do to give them a start in life. When I was a lad every parent seemed to want a first (pre PC) home computer so the kids wouldn't be left behind by the Information Age. Now some parents think the need to leave a mini-empire of wealth or their kids are falling behind. I think it is just Maslow's heirachy of needs, where a little comfort leads to the desire for luxury beleifs and a sense of legacy.

It is shocking how ungrateful some people can be, but only the people directly involved will ever know the full story. No shade on your acqaintance intended by that, but my late father would have had you believe I was the devil at times.

[Axeman123]

13 minutes ago, Wight Flight said:

They really don't care about repayment as it is asset backed. We would still be lending like it was 1980 if it wasn't for regulations.

1980? 3x main plus 0.5x the wifes income? I am not sure that I follow...

Surely the lending post 2000 to date was of its time, ie pro-cyclical, hence rooted in assumptions of falling interest rates and rising asset prices forever. Why would post great recession of 2022/3 lending not be similar, ie cautious or downright fearfull and defensive?

[Wight Flight]

Just now, Axeman123 said:

1980? 3x main plus 0.5x the wifes income? I am not sure that I follow...

Surely the lending post 2000 to date was of its time, ie pro-cyclical, hence rooted in assumptions of falling interest rates and rising asset prices forever. Why would post great recession of 2022/3 lending not be similar, ie cautious or downright fearfull and defensive?

You are correct. I am getting old.

Was it the late 1990s that you could get 110% on interest only?

[Axeman123]

Just now, Wight Flight said:

You are correct. I am getting old.

Was it the late 1990s that you could get 110% on interest only?

200X - 2008 roughly, I think.

[Wight Flight]

3 minutes ago, Axeman123 said:

200X - 2008 roughly, I think.

I could confess that around 2005 i had a seven figure interest only mortgage at 0.5% over base.

[JoeDavola]

I notice that the main NI property website now beneath each property gives a monthly mortgage estimate based on a 30 year mortgage.

Which must mean a 30 year mortgage is considered 'the norm' now.

[tank]

Given the type of immigrants the Tories are importing by the millions, I'm not surprised they're now talking about creative solutions such as multigenerational mortgages. 

They're going to need to replace the Poles and the like with a lot more third worlders to hit their GDP targets.

For example, people from the subcontinent have no problem with three generations living under the same roof. A 3 bed semi can easily fit in 12 people if they're used to slum living. 

It'd expect this to become another big prop for the UK housing market over the next 20 years.

[HousePriceMania]

On 02/07/2022 at 08:57, Boon said:

Seems more like desperation. Maybe it could work in Japan where conformity is higher. I doubt it here.

The obvious question is, what happens if you don't have kids, and if you do what happens if your kids refuse to be saddled with a debt they never agreed to?

It pisses me off how morally stupid and greedy people have become, that in order to keep house prices high an idea is floated to put the unborn into debt straight away.

It didn't even work in Japan.

 

 

This is another sign that the game is up.

Might as well rent for the next 30 years because buying is dead money

[mh9000]

2 hours ago, HousePriceMania said:

It didn't even work in Japan.

 

 

This is another sign that the game is up.

Might as well rent for the next 30 years because buying is dead money

Just to play devil's advocate - what's the influence of population growth between Japan (which has minimal I think) and UK?

[Boon]

Bigger picture for Japan is here:

https://www.ceicdata.com/en/indicator/japan/nominal-residential-property-price-index

Maybe that's what is regarded as a soft landing? The recent 'low' was 2010 which was almost half of the previous high.
Price growth has been very little since then, maybe 1-2% a year but loads of money printing, obviously most went into treasuries and did not touch the market.

However could we follow a similar path? (must factor in inflation, we we have had but Japan has not). Only considering London and the areas I follow but a 50-60% cut in prices off the highs would leave properties in line with wages... ie average families would be able to buy average homes, singles in starter jobs would be able to buy crappy bedsits, executives could afford executive flats without buying schemes. None of these are happening at the moment unless you have the fortune of previous equity and/or BOMAD.

All very well asking for mean reversion but one thing that is missing that a generation ago there wasn't governments around the world debasing their currencies into oblivion. If hard assets are a hedge against that then this insurance should become more expensive. 

[tank]

3 hours ago, HousePriceMania said:

It didn't even work in Japan.

 

 

This is another sign that the game is up.

It's a sign of Japan's admirable homogeneity that IG mortgages have sunk.

However, a word of caution. Japan has never experimented with mass immigration or neoliberalism, but the UK excels at both. 

The thought of importing millions of third world slum dwellers to pump GDP via continuous credit expansion and rentier services would be unthinkable to the average Jap. They have high tech, high value industries and don't need an ever expanding population. It would destroy their societal cohesion and way of life. 

[With a crooked smile]

On 04/07/2022 at 08:44, HousePriceMania said:

It didn't even work in Japan.

 

 

This is another sign that the game is up.

Might as well rent for the next 30 years because buying is dead money

If you really thought that was true you wouldn't spend so many of your waking hours constantly going on about house prices.