OK, this is a long shot, but do any of you wonderful brokers know anything about Japanese mortgages, specifically the long-term mortgages that are handed down through generations? It's clearly pegged on Boris's ramblings this morning. If so, can you please try and explain it in simple language? Also, leave your mobile number here to make it easy for the Sunday Times journalist to contact you if need be.
3 responses from the Newspage community
Japanese mortgages are not something we have really come across in the Western world, albeit their creation stems from the same problems we are now seeing: sky-high house prices when compared to average earnings. The result was a 100-year mortgage product that children inherit along with the property it is secured against. However, from the little information I have been able to find online they were not deemed a great sucess (the average mortgage term in Japan is 35 years currently). The 100-year mortgage, rather than helping the young, was used more by the wealthy as an estate planning tool to reduce their inheritance tax, with the additional issue that it in fact increased property values further - so it made the problem it was trying to help worse and reduce the Government's tax receipts at the same time, not an ideal solution. My contact number is 07941 122792
This relates to passing mortgages secured against properties to children. What would happen in effect is I take a mortgage that I'm not going to pay off in my lifetime and I pass the debt and the property on to my child. It didn't solve any problems in Japan and it won't solve any problems here. The issue isn't with the mortgage market, it's with house prices and wages so out of kilter combined with a lack of new homes built to keep up with demand. Looking for quick fixes is doing nothing to address the problem. We have too few homes and a widening income inequality. 07415358655
Around 15 years ago, Kent Reliance Building Society brought the Japanese-style 100-year mortgage to the UK, however it was not well received by the market for various reasons. It essentially provides increased borrowing capacity where standard affordability calculations do not work, with an underlying benefit that a property can be purchased as a family investment. My mobile for further info is 07595507879