Property price crash if Tories win

Cleaver

Thrugelmir wrote: »

There would a knock on effect. From the direct loss of jobs would eminate an indirect loss. The whole economy interlinks.

I understand that. It's still just 0.3% of the population though isn't it?

Kohoutek

It obvious depends where the affected jobs are. The areas where house prices would suffer the most would probably be the areas with the highest proportions of public sector employment - i.e. the North East, Wales, Northern Ireland (and I think there have already been significant drops there). It's probably not going to have a big effect on the London property market.

Really2

Thrugelmir wrote: »

Natural wastage saves paying redundancy claims.

Net reduction in public sector employment. Cuts by stealth.

Correct but that is not going to increase the jobless totals is it. These people will not be signing on as they have not been made redundant.
So in essence the article is wrong because there will not be 230,000 made redundant/cut it will be natural wastage.
So not sure how 230,000 retiring or finding a new job will make houses fall by 20%?

Emy1501

SMI has been funded till December as far as I'm aware so unless the Tories are going to scrap it few people losing their jobs will be forced to sell their jobs. Also suggestions are there is a funding gap of 30-40b for each party over the next few years so if cutting 6b from the economy this year is going to cut prices by 20% what are we going to see over the next few years when we get to 30-40B?

Sounds like scare mongering to me.

Jonbvn

The article sounds like nuLab spin aimed at middle-class voters.

In far less words "Vote Conservative = HPC".

Perhaps nuLab should concentrate on coming 2nd.

System

Looks like labour electioneering to me.

He seems to think 250,000 unemployed with cause 20% drops (he doesn't mention anything else), which obviously isn't true.

I like this bit:
""On our calculations, Labour's 1.5% spending cut for 2010-11 equates to 120,000 jobs, while the Conservatives' 2.8% cut would shed about 230,000.""

You can see what detailed calculation they used there, amazingly complex model.

Really2

Joeskeppi wrote: »

Looks like labour electioneering to me.

He seems to think 250,000 unemployed with cause 20% drops (he doesn't mention anything else), which obviously isn't true.

I like this bit:
""On our calculations, Labour's 1.5% spending cut for 2010-11 equates to 120,000 jobs, while the Conservatives' 2.8% cut would shed about 230,000.""

You can see what detailed calculation they used there, amazingly complex model.

Also did we not see the jobless increase by 1m during the recession and that equated to a 20% drop? (well less than that now)

chucky

Thrugelmir wrote: »

There would a knock on effect. From the direct loss of jobs would eminate an indirect loss. The whole economy interlinks.

is this how your prediction of the gilt strike that was going to happen interlinked with interest rates rising. yawn....

chucky

these articles do make me chuckle (can you see what i did there)...

just because they publish what you'd like to happen doesn't mean that it will happen and is anywhere close to being realistic.

people cling on to these stories emotionally as if they were guaranteed to happen.

don't forget to keep up the good work, the HPC cult will never let you down.

Generali

Cleaver wrote: »

Interesting article.

I'm not going to pretend to know the answer to this, but would shedding 230,000 public sector jobs really have so much of inpact on house prices as to make them fall 20%?

A quick, Cleaver-stylee back of a fag packet calculation: 37 million people of working age in the UK, and 72.2% of them work. So that's 26.7 million people working in the UK. If the Tories cut 230,000 public sector jobs it would represent a cut of 0.9% of people working. Our population is around 61 million, so 230,000 represents 0.3% of the population as a whole.

Obviously a lot of these people would get jobs, but let's say for sake of argument that they don't. Would 0.3% of the population losing their jobs cause a 20% decrease in house prices? If so, how?

Let's try a Generali-style back of envelope calculation.

Deficit is £170,000,000,000 of which half is said to be cyclical and the other half structural. That chimes with the politicians saying they'll halve the deficit (the easy bit) and leave the hard bit alone.

So we're down to a deficit of £85,000,000,000 or a little over 6% of GDP by doing pretty much nothing.

Now let's say we're happy to run a deficit of 2% of GDP as that is slightly less than annual GDP growth so that keeps the ratio of deficit:GDP constant. Now we need to save say £60,000,000,000.

Tories decide to keep Labour's NI reforms so now we are down to finding £54,000,000,000. Lose 230,000 jobs through natural wastage @ £30,000pa each in wages saves another £7,000,000,000 so now we need to find £47,000,000,000.

Government spends about £600,000,000,000 so say they can shave off 2% in efficiency savings (don't increase pay with inflation, buy cheaper paperclips) which is another £12,000,000,000 saved, leaving another £35,000,000,000 to go.

That leaves the hard yards. You'll have to lose a million more off the Government payroll to make that up, or cancel or curtail some big programs.