I can see the logic but I think it would be impossible to implement. It would have to be a worldwide policy or people would still get mortgages from foreign banks. I think the problem in the UK is that we're obsessed with owning our own homes, however hard it is to pay off the mortgage. More cheaper rental properties might improve things.
Property is a great investment and many people that have zero savings still have something when they own their home. I think declining property prices would probably have a lot of negative economic repercussions.
It would be relatively easy to remove mortgages, you can pass legislation that applies to any home within the UK. And I agree that we need cheaper rental accommodation but that will be cheaper to do after the value of the pound goes up. I actually think the opposite will happen, if it happens gradually then people will have a lot more money to spend monthly and also be better of due to value of pound increasing.
If the pound goes up, exports become more expensive, people stop buying our goods. The economy suffers, then people find it even harder to buy a house. If people have more money to spend, wage growth slows down. Part of the reason why wages are high is because people have big mortgages to pay off. The banks would all collapse, might not seem like a bad thing but many people rely on them for their pensions. I think there would be a mad rush to sell houses and move to a country that doesn't do this :)
We don't export much anyways except services. Wages wouldn't need to grow if the price of living is lower. Banks wouldn't collapse they would just change and they would have to, this would be a gradual process obviously if you did it all at once then your scenario would happen.
£50,000 million a month in exports is a significant amount. Also, aren't mortgages in personal debt and not the national debt? I'm not sure why it would make the pound increase in value?
Well i'm assuming the debt is still in the pound and it states it is national debt and the national debt is higher if you include pensions ect. Why would the exporting cost go up for other countries, surely the UK economy would adjust and lower the amount of pounds payed so the value becomes the same as before.
To lower the value of the pound, more have to be printed and put into circulation (quantitative easing) but that triggers lots more economic problems, like stagflation. That's happened in the past decade, it hasn't worked well.
no i'm not talking about lowing the pound in general that goes against the idea. The payer for our services would just pay less in pounds for the same value