This week’s discussion group delved into the complex topic of mortgages and inflation in relation to council tax. Overall, there was a consensus that although mortgages and inflation may seem tangential to the administration of council tax, they play a crucial role in shaping policies and strategies, as they significantly impact citizens and their financial decision-making.
The more seasoned members of the panel referred to the inflationary periods of the 70s and 80s. It was also noted that inflation has remained stable and low for the past fifteen years. This prolonged period of stability is quite substantial, especially considering that the current working-age Generation Z and even millennials have not experienced the financial and economic fluctuations that were typical in the past.
Before hastily criticising these generations for their financial choices, it is important to recognize that since the 2010 general election, the financial products offered to these cohorts have been designed with the prevailing low inflation in mind. Contrastingly, those of us who obtained mortgages during the era of progressive rock, disco, and punk were restricted to borrowing a maximum of twice our income. In contrast, modern mortgage holders can secure loans of up to six times their income, which means that higher mortgage rates have a much greater impact. While we could navigate through challenging times with mortgage rates as high as 15%, such levels would severely disrupt the housing market and the overall economy.
For further information on council tax, mortgages, and inflation, feel free to visit our website and check out my blog at https://bit.ly/VNMCTI.