House Price Crash Discussion Thread

adr0ck

MiserlyMartin wrote: »

Basically she is almost admitting that there is not much the MPC can do to prevent a house price fall. Due to inflation they can't cut rates anymore. They are stuffed.

she is also saying that if they fall the economy is stuffed

luvpump

carolt wrote: »

Shame..... :rolleyes:


http://news.bbc.co.uk/1/hi/business/7253527.stm

House price 'threat' to economy

A downward spiral of falling house prices and reduced mortgage lending poses the biggest short-term threat to the economy, says a leading economist.

Kate Barker, a member of the Bank of England's Monetary Policy Committee, warned that the bank would not be able to stop this in the short term.....

Although i understand she is an external member of the policy committee... he status is such that she no doubt contributed to the Crazy levels of Debt our society is based on by ignoring the house price boom until it was too late...rates coming down too low too fast..the economy needs to contract to a more sustainable level .. all this dimwit is advocating is more champagne to keep the party going longer ..

WTF?_2

MiserlyMartin wrote: »

Basically she is almost admitting that there is not much the MPC can do to prevent a house price fall. Due to inflation they can't cut rates anymore. They are stuffed.

Never say never. Most of the economy is dependent on the credit/house price bubble continuing apace. Inflation is a decades old memory these days for many economists and city bods and there are already rumblings about 'relaxing' monetary policy in favour of stimulating the economy. (Like 7-8 years of intense over-stimulation hasn't been enough...)

Don't forget, now that NR is nationalised the government has a very direct interest in keeping house prices rising in addition to their addiction to pampering the financial services sector and encouraging retail spending. Falling prices would hurt them through increased defaults on the NR mortgage book.

Just like the Fed in the US, they will throw sensible economic policy to the wind when crunch time comes and we'll be paying the price for years to come.

wolvoman

In many ways the best solution would be the government to use some fiscal stimulation to help the economy and that way interest rates might be able to be left where they are.

Cutting fuel duty by a few pence would be a start, followed perhaps by raising the higher rate tax thresholds by £10K.

Generali

Fiscal stimulus is pretty useless anyway and cutting fuel duty would lead to a large amount of the extra cash spent going to oil exporting countries as UK production is at capacity.

Much better to let things run their course with a recession if needs be.

Mr._H_2

wolvoman wrote: »

Cutting fuel duty by a few pence would be a start, followed perhaps by raising the higher rate tax thresholds by £10K.

Yeah, encourage people back into their cars and make rich people richer! Excellent plan :rolleyes:

A better stimulation package would be to substantially raise the personal allowance and then lower the higer-rate threshold such that the move is tax-neutral. Then the poorest in society would have less need for benefits (and then the tax that funds it can be spent elsewhere) and/or more money to spend and they'd spend it. Middle-earners would pay the same amount of tax overall and the rich would have less, but that would probably affect savings more than anything else.

WTF?_2

wolvoman wrote: »

In many ways the best solution would be the government to use some fiscal stimulation to help the economy and that way interest rates might be able to be left where they are.

Cutting fuel duty by a few pence would be a start, followed perhaps by raising the higher rate tax thresholds by £10K.

Absolutely - well off plonkers who bought expensive houses and then MEWed the hell out of them during the property bubble to get their 4x4s and exotic holidays really need our help in their time of need. :rolleyes:

wolvoman

Higher rate tax starts at £39K. In London that is just average salary.

Most builders, plumbers, surveyors, electricians, managers earn above that.
Some teachers, chefs, nurses, policemen earn above that.

Where does the idea that raising it from £39K to £49K somehow benefits the rich come from?

Mr._H_2

wolvoman wrote: »

Higher rate tax starts at £39K. In London that is just average salary.

Most builders, plumbers, surveyors, electricians, managers earn above that.
Some teachers, chefs, nurses, policemen earn above that.

Where does the idea that raising it from £39K to £49K somehow benefits the rich come from?

Damn it! Why is the "thanks" button right next to the "quote" button and why can't I "unthank" people?

£39K is a huge salary. If you are earning that and aren't rich, you're doing something wrong.

There are threads elsewhere on this site dedicated to people living on £4k per year after essential bills. I don't care what your job title is, earning anywhere close to £39K makes you very well off.

WTF?_2

wolvoman wrote: »

Higher rate tax starts at £39K. In London that is just average salary.

Most builders, plumbers, surveyors, electricians, managers earn above that.
Some teachers, chefs, nurses, policemen earn above that.

Where does the idea that raising it from £39K to £49K somehow benefits the rich come from?

I don't know what the actual figures are for average salary are in London, but I'd bet far more people earn less (often quite a bit less) than 39k that earn more than 39k. The mega rich are bound to skew the mean figure.

And then there's the slight fact that not everyone has a job in London.


Your plan seems to me to be tailored to helping those well off Londoners who overstretched themselves. :rolleyes: