Mortgage Rate Rises

[Participant]

Embracing remote work and letting people live wherever they want would partly solve the city housing crisis. Unfortunately politicians are more concerned with listening to the lobbying of big business so they can avoid large write downs on expensive ex-prime real estate.

 

[rypt]

People will slowly adjust to the higher rates

That's the problem - people will adjust "slowly"

If only the speed of the rate increases was also "slow"

 

[rypt]

Embracing remote work and letting people live wherever they want would partly solve the city housing crisis. Unfortunately politicians are more concerned with listening to the lobbying of big business so they can avoid large write downs on expensive ex-prime real estate.

This is going to take us on a tangent... but, I don't feel that remote work is necessarily the most productive way to work.

I have flexibility for hybrid/remote work - however feel that best collaboration often occurs from being able to work and meet with people in person

 

[HangTime]

we went from 10 years of near zero rates, to over 5% without the rest of the economy (eg. wages) having time to adjust.

I dunno, last stats I saw for wages they'd grown by about 8% YoY. In fact part of the reason interest rates went up was to counter-balance the inflationary elements of wage growth. Part of me thinks rates didn't rise fast enough, although I'll temper that as generally speaking it's not good to introduce shocks to the economy.

 

[rypt]

In fact part of the reason interest rates went up was to counter-balance the inflationary elements of wage growth. Part of me thinks rates didn't rise fast enough, although I'll temper that as generally speaking it's not good to introduce shocks to the economy.

Those "inflationary" elements were driven by:
- a loss of labour supply thanks to Brexit
- a loss of goods supply thanks to Brexit
- geo-political events in Ukraine


Funny how 2 of those 3 were caused by our own government

 

[radderfire]

In fact part of the reason interest rates went up was to counter-balance the inflationary elements of wage growth.

I would say the reason for high wage growth is that the central banks printed a boat load of money (inflation of the money supply), meaning prices of goods and services had to rise, and this meant people demanded wage rises, because they were no longer being paid enough. Thus wage growth is a consequence of inflation and not a cause of it.

 

[IvanDobskey]

I have 18 months left on my 1.8% 5 year fixed deal now. Still hoping to get it paid off before it ends though.

 

[Richie]

There is plenty of cheaper (or even just cheap) housing in Australia outside of the big cities but outside of the big cities is not where people want to live.

Given most jobs are likely located in the big cities, I'd imagine they want to live semi-close to where they work which is not unreasonable.

 

[b0rn2sk8]

Given most jobs are likely located in the big cities, I'd imagine they want to live semi-close to where they work which is not unreasonable.

Well yes, that was exactly the point of the last few words of my post without mansplaining it .

However, the point still stands in that you can buy land by the hectare for not a lot in Australia and get permission to build 'not that far' from towns and cities (in the grand scheme of Australia...). You can not do that in the U.K. anywhere.

 

[Richie]

...last few words of my post without mansplaining it.

Good one

 

[200sols]

Well yes, that was exactly the point of the last few words of my post without mansplaining it .

However, the point still stands in that you can buy land by the hectare for not a lot in Australia and get permission to build 'not that far' from towns and cities (in the grand scheme of Australia...). You can not do that in the U.K. anywhere.

Australia is something like 32 times larger than the UK so it's not surprising is it? The two countries are very different.

 

[delta0]

Australia is something like 32 times larger than the UK so it's not surprising is it? The two countries are very different.

Only 10% of it is habitable. That’s still larger than the UK but not as much as you would think.

 

[200sols]

Only 10% of it is habitable. That’s still larger than the UK but not as much as you would think.

A lot larger and with a much smaller population. People are not comparing things like for like really, housing prices are the same the world over where there is high demand. Not a UK specific thing.

 

[delta0]

A lot larger and with a much smaller population. People are not comparing things like for like really, housing prices are the same the world over where there is high demand. Not a UK specific thing.

Climate change will make the habitable land even smaller. The north west will be the first to go.

Definitely agree. High demand will always drive prices. UK has always had this.

 

[Mesai]

This is going to take us on a tangent... but, I don't feel that remote work is necessarily the most productive way to work.

I have flexibility for hybrid/remote work - however feel that best collaboration often occurs from being able to work and meet with people in person

That’s going to depend entirely on the individual, team, company and line of work. Most places install Zoom and call that job done.

At least for London, there are decent rail networks linking surrounding areas that can easily get you into the city in under an hour. Maybe not ideal for 5 days a week, but hybrid is entirely possible. It’s not like it’s quick to commute inside of London unless you’re very well positioned relative to the office. It definitely expands what people can afford as your money goes further.

 

[Doughnut007]

I have the option to work from home or any of our sites but I find it far easier to work from my desk in the office.

 

[HangTime]

I would say the reason for high wage growth is that the central banks printed a boat load of money (inflation of the money supply), meaning prices of goods and services had to rise, and this meant people demanded wage rises, because they were no longer being paid enough. Thus wage growth is a consequence of inflation and not a cause of it.

It's cumulative though. The original cause of inflation might not be wages rises, but if people are demanding wage rises that puts further inflationary pressure in the mix. I think that's pretty undeniable. So it's Like A causes B and B causes C. The fact that B was triggered by A in the first place doesn't chance the fact that B is influencing C.

'You' (not you personally but that side of the discussion point that I was responding to) can't have it both ways though. You can't say "wages didn't have time to adjust" on the one hand and then say wages have risen in line with the inflationary pressures that resulted in interest rate rises on the other.

The facts are that interest rates and wages have both risen on a very similar timeframe, considering the typical monetary lag I'd say it's very closely aligned.

 

[Raumarik]

I have the option to work from home or any of our sites but I find it far easier to work from my desk in the office.

I was the same but when I moved job it was home based. This threw me for months, it's only after 4 or 5 months my brain seemed to adjust from 25 years being an office/site worker. I occassionally go into an office now and it seems odd, noisy and distracting. I'm that use to working in either music I choose or complete silence now.

I have a friend who never managed to adjust and ended up changing jobs back to an office based one, I totally get why it can be difficult though.

 

[HangTime]

Most places install Zoom and call that job done.

I've written extensively on this in the past but to me this is the biggest hurdle to effective hybrid working.

Making office-only work effectively isn't hard.
Making remote-only work effectively isn't hard.
Making hybrid work effectively is hard and needs focus beyond just saying "yeah we come in the office X days per week and use Teams/Zoom for remote people innit, best of both worlds". No, that's the worst of both worlds if you don't have a proper strategy for it, focus on optimising working patterns, have training on how to accomodate a mix of office based and remote workers etc.

 

[rypt]

I've written extensively on this in the past but to me this is the biggest hurdle to effective hybrid working.

Making office-only work effectively isn't hard.
Making remote-only work effectively isn't hard.
Making hybrid work effectively is hard and needs focus beyond just saying "yeah we come in the office X days per week and use Teams/Zoom for remote people innit, best of both worlds". No, that's the worst of both worlds if you don't have a proper strategy for it, focus on optimising working patterns, have training on how to accomodate a mix of office based and remote workers etc.

The part that you aren't addressing are the personal relationships that get built from meeting people in person.