Monday, Dec 04, 2017

People are broke because of housing costs

Joseph Rowntree Foundation: Benefits freeze: Families facing another 12 months of misery

There's a massive problem here. It's not that people are having their benefits frozen. It's not that housing costs have risen so high. This tells me that housing costs are unnaturally high. We see state subsidy of housing in two ways: Help To Buy helps people afford otherwise unaffordable purchases - and of course, prices will rise by exactly the amount of this subsidy. On the rental side, we see that benefits help(ed) people afford otherwise unaffordable rents. In short, this means that government money is going directly into the pockets of property development investors (who buy early stage off-plan and sell to the end-buyer) and landlords. And we just sit there and watches as our money gets siphoned offshore, tax-free and hear this is a triumph of the "free market". BS, I say.

Posted by sneaker @ 06:58 AM (2613 views) Add Comment

3 Comments

1. mombers said...

Dishonest to call it a benefits freeze. VAT and National Insurance have gone up enormously since 2010. Just to stand still, benefits would need to increase a lot rather than stay static. For most working age people, any benefits are just a partial tax refund. It is bonkers how much people on low incomes are taxed - what a waste of time and gross violation of private property rights. Yet the government keeps upping the personal allowance (£11,500) instead of the national insurance threshold (c. £8,500)

Monday, December 4, 2017 10:49AM Report Comment
 

2. sneaker said...

What I don't understand is why market forces aren't working.

If housing costs are so high that people are broke, they should come down.

Why isn't that happening?

I mean you can't eat bricks and mortar but you can choose to live somewhere cheaper.

Tuesday, December 5, 2017 10:25AM Report Comment
 

3. icarus said...

@1 - Government lies. Look at the lies the Trump admin give out for lowering Corporation tax and keeping CGT @15%. "It will bring back investment from abroad". There are over 50 years of statistics to show that this is false. The money won't return because it's invested where labour costs are much lower, or in buying existing companies or stock buybacks to boost equities and management 'earnings'.The purpose of the cut is to raise equities, on which the rich pay their 15%. Republican lies are that social services need to be cut so that the population doesn't need to pay higher interest rates (on mortgages, credit cards and student debt) to pay for the higher deficit (anyway, the Fed would just buy the Treasuries rather than raise IRs and create havoc with derivatives).

@2 What we have is pure looting - the financial sector turns discretionary consumer income into interest and fee payments to banks (rather than to provide capital for expansion). Debt is the force that keeps markets alive. Anyway, "I'm not broke, I own a half million-pound house, so the government should prop up the housing market".

Tuesday, December 5, 2017 01:45PM Report Comment
 

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