Property price crash if Tories win

Generali

Cleaver wrote: »

I know I keep saying this, but have mortgage rates changed that much? Most people were probably on 4% to 6% before the lowering of interest rates, and most are probably on between 3% and 5% now. It's only a small amount on trackers isn't it?

Also, isn't there about 14 million homeowners in the UK? If 200,000 are in mortgage arrears, that's about 1.4% who are in trouble with their mortgage. Which means that 98.6% either own their home outright or are 'fine' with their mortgage repyaments. That sounds alright to me. If I lent out a massive load of cash to millions of people I would probably expect a small percentage to have trouble paying it back at any one time. I'm sure someone can tell me just how wrong I am with this pretty soon.

Roughly half of Britons own their own homes outright so that implies that a little under 3% of mortgagees are in trouble.

AIUI, most people in arrears either sell to clear them, refinance or just get back on track. Only a minority are repossessed.

Cleaver

Generali wrote: »

Roughly half of Britons own their own homes outright so that implies that a little under 3% of mortgagees are in trouble.

Indeed. But I still think it's helpful to look at home owners as a whole. The ones with no mortgage are very safe, the ones who have a mortgage but are paying it each month are (presumably) pretty safe and then you have this small minority who are in trouble for one reason or another.

Would a bank expect around 3% of people with loans, current accounts etc. to be defaulting or going over overdraft limits at any one time? Seems an overall reasonable level to assume.

ninky_2

Generali wrote: »

I'm saying that if you increase taxes on something, less of it will happen. If you put a tax on work, less work is done; if you put a tax on cigarettes, less smoking is done. It's a pretty fundamental tenet of economics.

If you increase taxes on people earning more than say £200,000 then those people will on average work a little less hard and so the extra tax raised will be less than expected and GDP will be a little lower than otherwise. As you say, few people earn more than £200,000 so the effect will be marginal although very real for those impacted.

It doesn't really matter where you set the bar but to pretend that doing this doesn't have any impact is to fail to understand why marginality is central to how the economy works in many ways.

by that same logic we should raise the minimum wage considerably. why should the lower waged work as hard as those on megabucks? are you saying the amount people work is directly related to salary?

personally i think it's more related to their ability to keep their job, get promoted or the likelihood that someone else will work just as hard as them or more for the same money. it can also be to do with team motivation and the amount others are working around you.

earning less can actually motivate some to work harder in order to get a pay increase.

Kohoutek

ninky wrote: »

by that same logic we should raise the minimum wage considerably. why should the lower waged work as hard as those on megabucks? are you saying the amount people work is directly related to salary?

No, by that logic we should reduce the levels of tax imposed on the people earning modest incomes, to give more incentive to work more hours/earn more money.

Ignoring the benefits system for a second, how would increasing the minimum wage make people work harder if it's the legal minimum their employer is obliged to pay?

ninky_2

Generali wrote: »

No because clearly it doesn't work like that.

What happens in reality? You take 1,000 people and ask them whether they'd give up their Sunday morning for £1,000 and perhaps 900 would say yes. If you ask the same people if they'd give up Sunday morning for £950 then perhaps 897 would say yes. The small change in pay has led to a small change in outcome.

in my world it works like this.....

how about if you take the same 1000 people and say we need you to work sunday for the good of the company. or simply give them a task that involves working the extra day to hit a deadline. you don't even need to tell them they just know.

they can either point blank refuse ( but some of their colleagues might agree to they earn the extra brownie points), or decide to go along with it. especially if there are plenty of other people around looking for work and chomping at their heals.

some people have their cut off price and maybe they can take the risk to refuse to work harder or refuse work because the money isn't right. for most, it's not so straightforward.

there are plenty of times i have worked days / hours i haven't even been paid for at all just to get on, to stand out from the crowd or because i cared about the project i was working on. in television it's usual to sign a contract that exempts you from european working times regulations. but there are still plenty of people hungry to work and work really hard.

carolt

To be fair, ninky, TV work is probably not typical, because there are so many people desperate to get into it, and for 99% it's not for financial reasons, it's for love of the job.

I suspect Gen's theory works better for people with tedious office jobs.

ninky_2

carolt wrote: »

To be fair, ninky, TV work is probably not typical, because there are so many people desperate to get into it, and for 99% it's not for financial reasons, it's for love of the job.

I suspect Gen's theory works better for people with tedious office jobs.

but if these top earners are so clever and talented why are they doing tedious office jobs?