Houses for sale with pre-arranged mortgages

Nicholas Saunders

Although there is much competition to offer mortgages to house purchasers, the various financial bodies seem to have overlooked the simple and effective system in Denmark, where houses are put on sale with mortgages already arranged for whoever buys the house, irrespective of financial status. In this way, for instance, groups of young people in Copenhagen with less than L1,000 capital each have been able to move to the country and to buy small farms.

'In Denmark, houses are put on sale with mortgages already arranged for whoever buys the house, irrespective of financial status'

In Denmark, the monthly repayment figure is always quoted in the sale price of a house, almost as if it were a rent, although there is also a small deposit of 5 to 10 per cent.

The advantage for buyers is that there is no expense and delay whilst their viability is being checked.

The advantage for sellers is that the sale is less likely to be held up or to fall through once it has been agreed.

There is no good reason why someone selling a house in this country should not be able to arrange a mortgage for it on the security of the house alone. The present UK mortgage system insists on the double security provided by both the house itself and the purchaser's financial status, but the recent competition from banks and others could mean that the first institution to offer the Danish system would corner a healthy share of the market.

Nicholas Saunders, top floor, 14 Neal's Yard, London WC2H 9DP (tel 071 836 9404; fax 071 379 0135).

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