Chancellor may tax older taxpayers more than younger.

Vonhelmet · 19 Oct 2017 at 13:11

I've gotta be honest, my first thought was that the trend line looks rather ropey. After all, it's out by £100k at 2012, which is nearly 2/3 of the actual value according to the graph. If that trend line holds true to now, it should be hitting around about £450k by my reckoning, which would mean a threefold increase in the past 5 years, which seems unlikely.

In fact... the average house price in the UK in August 2017 according to the government's UK house price index was £226k, which is less than the trend line shows in 2012!

It's factually nonsense.

danlightbulb · 19 Oct 2017 at 13:32

Dj_Jestar said:

Exponential curve is broadly a good fit up to around 2008 then it fails to describe the market. Blip in 1990 though doesn't quite fit.

Probably a curve fitted between 1952 and 1990 would show a very good fit and then a second curve from 1995 to 2008 would also show a good exponential fit.

Y axis states 'real'. But they might mean nominal or could they be plotting as change from 1952 in which case that explains why 1952 is shown as zero?

Anyway, in nominal prices there is never an obvious big crash. This only shows up in inflation adjusted prices which for those of us living in the here and now is pretty useless.

Back to the OP. I am 37, divorced and having to save from scratch for a house of my own whilst paying rent on my own and child maintenance. I earn close to the higher rate threshold but single income household. Wouldn't see it as fair to tax me more, I'm no better off than a couple both earning £25k. Stupid idea.

dowie · 19 Oct 2017 at 21:05

Vonhelmet said:
I've gotta be honest, my first thought was that the trend line looks rather ropey. After all, it's out by £100k at 2012, which is nearly 2/3 of the actual value according to the graph. If that trend line holds true to now, it should be hitting around about £450k by my reckoning, which would mean a threefold increase in the past 5 years, which seems unlikely.

In fact... the average house price in the UK in August 2017 according to the government's UK house price index was £226k, which is less than the trend line shows in 2012!

It's factually nonsense.

yup it is nonsense, it is just a silly unlabelled curve on the graph

have some free time just now so decided to play around with the data - the curve seems to be a single term exponential model but only fitted using the data up to circa 2007 for whatever reason even though it is then plotted alongside the data up to 2012. (I don't know what the context of it was, perhaps related to the financial crash, but since the poster who pulled it and posted it here isn't exactly able or keen to answer anything then meh)

- have replicated it here:

and you're pretty close with your prediction of 450k, the 2017 data is now of course available and unsurprisingly after 10 years have past from the last datapoint used to fit the curve it is even further off:

By 2025 the same curve is getting close to 800k!

Dj_Jestar said:
You only need to use your eyes to see it is an apt curve for the upward trend of house prices.

that is somewhat missing the point - perhaps I can give you an example of why this is silly by taking it to a further extreme than the above - lets use the same dataset and pretend we're in 1990 and plot the same type of curve:

now you can look at that curve or trend line if you like (not 'the' trend line however as it isn't the only curve you could plot here) and how it's such an apt curve etc...

then we fast forward to the present day and see our formerly 'apt curve' extended - it now looks rather silly with the average house price exceeding £1.5 million!

Destination · 19 Oct 2017 at 21:12

danlightbulb said:
Exponential curve is broadly a good fit up to around 2008 then it fails to describe the market. Blip in 1990 though doesn't quite fit.
Stupid idea.

Which is precisely the point Jestar is unwilling to entertain, outside of London things have been static based over the past ten years.
That ******* of a curve he jumps over, doesn't remotely describe the past ten years.
Which nominally affect those in a certain age bracket.

The OP related to Hammons charging more in tax for older folks, rather than younger folks.
The concept being oldies have had it great all of their lives and the poor young folk have to pay double for everything and will never own a house.
I am suggesting, that anyone to mid-40s hasn't experienced this wonderful amazing culture of having everything that seems to be ascribed to them.
A generation has been missed out.
baby boomers might have had all the fun, but they're all bloody retired now, and I somehow double Hammond is going to fire up a double tax rate on pensioners.
It'll be the older workers he hits, those who have already been told they've to work extra years to get their pensions, even though they started thinking they would be final salary etc.

D.P. · 19 Oct 2017 at 21:13

Gixer said:
The age at which people are having family is getting older too though. I'm 40 next March but, all being well, my 1st child is due next month so things are going to get tougher for me at what may be considered older? as you say it does depend on at what age older begins however you can have a child at any age as long as the body allows it. Tricky balance to find if you ask me. There is never going to be a solution that'll work for everyone so things will simply keep changing as someone will always be complaining.

Which is why I said it is not really making sense. Better off simpyl reducing taxes on low income earners, increasing taxes on the high incoming earners, and trying to give better support for renters. such as more regulations on contracts and price increases.

dowie · 19 Oct 2017 at 21:23

danlightbulb said:
Exponential curve is broadly a good fit up to around 2008 then it fails to describe the market.

indeed and well it turns out it is actually only fitted using data up to that point

Y axis states 'real'. But they might mean nominal or could they be plotting as change from 1952 in which case that explains why 1952 is shown as zero?

the data set actually gives data per quarter, it starts in the last quarter of 1952, I just think it looks sloppy to leave null values at the start of the graph, tis just a minor quibble though

Anyway, in nominal prices there is never an obvious big crash. This only shows up in inflation adjusted prices which for those of us living in the here and now is pretty useless.

inflation adjusted prices would give a better picture tbh.. and would more clearly illustrate that the crash which affected plenty of people was very real - of course the other poster wanted to play down the crash

Dj_Jestar · 19 Oct 2017 at 22:10

Ja, because there's only a curve on that graph that is just a visual representation of the trend, that is clearly a trend that is exponentially growing. But hey, never mind the numbers on the other line showing no crash for those sat on the property ladder for the last 40 years+. And the other graph showing it was London hit hardest, too. No, let's just focus on the curve. We'll also ignore that the data comes from Nationwide and focus entirely on the people who drew the graph.

Destination · 19 Oct 2017 at 23:10

Dj_Jestar said:
Ja, because there's only a curve on that graph that is just a visual representation of the trend, that is clearly a trend that is exponentially growing. But hey, never mind the numbers on the other line showing no crash for those sat on the property ladder for the last 40 years+..

Yes, and those on property ladder for fourty years will be retired.
They will not be effected by any changes that Hammond brings in.
Which was my point.
You seem to continue to ignore this.

dowie · 19 Oct 2017 at 23:13

Dj_Jestar said:
Ja, because there's only a curve on that graph that is just a visual representation of the trend, that is clearly a trend that is exponentially growing. But hey, never mind the numbers on the other line showing no crash for those sat on the property ladder for the last 40 years+. And the other graph showing it was London hit hardest, too. No, let's just focus on the curve. We'll also ignore that the data comes from Nationwide and focus entirely on the people who drew the graph.

point was the supposed trend was already a bit off on that graph (turns out was only fitted to 2007 or so) and then even more off when looking at 2017... just fitting a curve to some time series data like that isn't particularly useful anyway

anyway, there are of course inflation adjusted prices from nationwide too:

danlightbulb · 19 Oct 2017 at 23:21

I don't think inflation adjusted prices is useful really. If you were around in 1995 you would find that prices were around the same as in 1990. They didn't drop by £50k like that chart suggests and the 'crash' wouldn't have helped people get on the ladder In the short term, just like now.

muon · 19 Oct 2017 at 23:46

danlightbulb said:
I don't think inflation adjusted prices is useful really. If you were around in 1995 you would find that prices were around the same as in 1990. They didn't drop by £50k like that chart suggests and the 'crash' wouldn't have helped people get on the ladder In the short term, just like now.

But over the 5 years their wages would have increased in line with inflation (if not more). So yes it does matter.

More recent data below you can see how nominal earning have grown just about keeping up with inflation. This is even with weak earnings growth for the last 10 years.

https://www.ons.gov.uk/employmentan...mentaryanalysisofaverageweeklyearnings/latest

That's why it is usually a good idea to adjust everything with inflation and then you can compare like for like.

The_Abyss · 19 Oct 2017 at 23:51

danlightbulb said:
I don't think inflation adjusted prices is useful really. If you were around in 1995 you would find that prices were around the same as in 1990. They didn't drop by £50k like that chart suggests and the 'crash' wouldn't have helped people get on the ladder In the short term, just like now.

I beg to differ. House prices were plummeting then, and interest rates were slashed from around 14% to around 6%. Repossessions increased sharply, as they first had in the mid-80s. Inflation dramatically decreased, as did wage increases. It was a significant correction.

muon · 19 Oct 2017 at 23:54

The_Abyss said:
I beg to differ. House prices were plummeting then, and interest rates were slashed from around 14% to around 6%. Repossessions increased sharply, as they first had in the mid-80s. Inflation dramatically decreased, as did wage increases. It was a significant correction.

The problem is that people do like to think of earnings growth being entirely real. After all you earned that last pay rise, so ignore the fact at times earnings growth can outstrip say house prices.

The_Abyss · 20 Oct 2017 at 00:02

muon said:
The problem is that people do like to think of earnings growth being entirely real. After all you earned that last pay rise, so ignore the fact at times earnings growth can outstrip say house prices.

I agree that can happen, but it is only part of the story. For example, from 1990 - 1995 unemployment rates increased enormously, from around 7% to near 11%. People weren't quite throwing house keys back at banks and building societies like they were in the mid 80s, but it wasn't far off.

theone8181 · 20 Oct 2017 at 07:40

My personal view (as a 31 year old who bought a house in 2009) is that those who bought pre-2000 (logically 40+ group) will make money from the massive increase in house values. I bought mine for 196,000 and its maybe worth £225k now. Thats up north tho where the gains are slower, however looking up house prices the house was built in 1996 and sold for 68,000. So someone has made a nice amount of money for doing nothing. I've resigned myself to the fact that i won't make any money on houses but that older generation will have loads more disposable income due to being on the ladder so much earlier.

w1ze1 · 20 Oct 2017 at 12:35

I bought my flat in 94 and have tripled its worth but spent a lot on it also and to sell it does not give me "disposable income" as I need pay over the odds for someone else's home they are selling.

I am 46 and TBH do not have time for most of todays younger gen (not a blanket statement).

I do not think older people should pay more and I also do not think people who worked longer hours (overtime) should get hammered by tax as I did in my last job.

You get rewarded for being lazy (benefit systems abusers) and hit in the pocket hard for hard work.

Spook187 · 20 Oct 2017 at 12:43

w1ze1 said:
I bought my flat in 94 and have tripled its worth but spent a lot on it also and to sell it does not give me "disposable income" as I need pay over the odds for someone else's home they are selling.

I am 46 and TBH do not have time for most of todays younger gen (not a blanket statement).

I do not think older people should pay more and I also do not think people who worked longer hours (overtime) should get hammered by tax as I did in my last job.

You get rewarded for being lazy (benefit systems abusers) and hit in the pocket hard for hard work.

I have been offered to work over Xmas for £900 a day and I have refused because a good chunk of it is taken away from me through tax once I start banging them sort of shifts in.

w1ze1 · 20 Oct 2017 at 12:44

WTF do you work as for that coinage lol?

Spook187 · 20 Oct 2017 at 12:50

w1ze1 said:
WTF do you work as for that coinage lol?

Just Railway engineering works. I am being badgered to death in getting me to work, nope lol.

w1ze1 · 20 Oct 2017 at 12:58

If you have family not nice esp. if they are young, its good time for that but I am over Xmas now lol.