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Home Ownership Only For The Elite

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Jennifer Warner from Globrix.com said: “Many young people who want to get on the property ladder have accepted that they will be much older by the time they finally do. A significant portion have given up the dream altogether.

“What we’re seeing is a major generational shift towards the realisation that buying your own home will be an elite rather than a mainstream lifestyle choice in the coming decades, and to a large extent only those with wealthy parents who can contribute towards a deposit will be able to buy a place of their own.

“Many young people already accept renting as a long-term alternative to buying, and with average university debt set to increase significantly over the next few years we can only see this trend strengthening.”

Even with falling house prices I fear she'll be proved correct.

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Even with falling house prices I fear she'll be proved correct.

This scenario sort-of assumes nothing will change though. Question, who will these young renters vote for? A party that promises a massive house-building program or a party that promises landlords their allotment of slaves?

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Of course, this isn't taking into account the danger of only allowing an elite of society to have security and own property ( as this will then turn the rest of us into *real* slaves - look how well that state of affairs does historically) , I predict a serious and prolonged era of civil disorder will be on the horizon if this isn't addressed.

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Of course, this isn't taking into account the danger of only allowing an elite of society to have security and own property ( as this will then turn the rest of us into *real* slaves - look how well that state of affairs does historically) , I predict a serious and prolonged era of civil disorder will be on the horizon if this isn't addressed.

Address the problem with a progressive land value tax. Let the propertied classes take the burden of taxation. It will help redress some of the great wealth imbalances in the UK. Not all of them, but it will go a long way.

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Address the problem with a progressive land value tax. Let the propertied classes take the burden of taxation. It will help redress some of the great wealth imbalances in the UK. Not all of them, but it will go a long way.

Yeah, fine people for using their already taxed income to buy a home.

Great idea.

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This scenario sort-of assumes nothing will change though. Question, who will these young renters vote for? A party that promises a massive house-building program or a party that promises landlords their allotment of slaves?

Nothing will change until the majority of the electorate ARE landlord's slaves. Nothing serious is being done to address housing, although ministers of all parties acknowledge it as a 'crisis'. There are too many VIs making far too much money out of property and leaning heavily on the government to keep the Boomers, house builders, CML, EAs and the BTL brigade in clover.

Who will put their heads above the parapet and change the situation? It's quite simple; strip out the profiteering and you are able to build homes that people can afford without a lifetime of slavery. It would be very, very popular with the young and priced out. Unfortunately they are the minority now but 15-20 years from now?

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A decade into above long-term HP trends, sentiment has moved from the short-term concept of a bubble to a medium-term situation. Real damage is being done to UK society now as high HPs result in young couples delaying to have families and / or massively stretching themselves financially to afford property that previous generations took for granted.

The scenario portrayed in this article is the long-term perspective when things remain as they are now. For this to apply, I would expect there to have been no significant HPC by 2020. At that stage, permanent damage will have been done to the fabric of UK society. The demographic situation will have shifted against families larger than a single child and even immigration wont be able to offset this decline. Whole industries will have been wiped out, unable to pay the UK salaries needed to maintain such high HP levels. Benefit and NEET culture will dominate as young people see no point in trying to begin saving for a house deposit. The writing is on the wall (the similarities with Japan are evident too).

Even the HPC which is happening now in real terms will mean little if salaries don't rise above inflation soon.

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Yeah, fine people for using their already taxed income to buy a home.

Great idea.

Not so fast Bogbrush.

First of all you have to remember that a higher tax on something like Land Value, allows you to reduce taxes elsewhere. In particular I was thinking that you could reduce income tax, that being a big one. So it isnt a case of one tax on top of another.

So what you have net, is a much higher burden of tax on those with very high value properties in aggregate. Those people who have them can clearly afford higher taxes, but at the margin they will eventually get squeezed, and that will stop them pricing out the little people.

The little people will find that they pay less tax overall, and they may find that due to lower demand for property and land from richer people, they can afford their own plot whereas they couldnt before. If LVT is progressive, their overall tax position after buying some land that the rich can no longer buy, will leave them better off.

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Nothing will change until the majority of the electorate ARE landlord's slaves. Nothing serious is being done to address housing, although ministers of all parties acknowledge it as a 'crisis'. There are too many VIs making far too much money out of property and leaning heavily on the government to keep the Boomers, house builders, CML, EAs and the BTL brigade in clover.

Who will put their heads above the parapet and change the situation? It's quite simple; strip out the profiteering and you are able to build homes that people can afford without a lifetime of slavery. It would be very, very popular with the young and priced out. Unfortunately they are the minority now but 15-20 years from now?

Sorry, forgot the big one, bankers who have the most to gain from people swapping their little overpriced boxes for ever increasing amounts and borrow it all from the banks. :ph34r:

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One thing that puzzles me about long term renting promoted as an alternative to home ownership is what happens when you retire? At least with home ownership you will eventually own the home outright, hopefully before retirement then have somewhere to live 'free'. long term renters will have to pay rent until they die, not a nice prospect.

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If you're planning on not buying then you may as well stash all your cash into jewellery and artwork that you can keep and sell when you need the cash. Goods aren't included in benefit claim exclusions - so you could have £40k worth of gold and still get LHA and JSA etc.

Mind you, you might want a safe or two.

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The thing that is holding the UK political system together is the fact that most people born before 1975 are having few problems economically. Yes, they might gripe about the price of petrol and train fares, but the fact is the vast majority of them have stable housing with a driveway to park their car on, and a job to commute to which pays enough for them to maintain that lifestyle. For most under-35s that lifestyle is a fantasy, but there are simply not enough of them for politicians to care.

However, time will pass, and the demographic structure of the UK cannot be held in its current state forever. The median age in the UK is about 38, so excluding the under 18s the median voter is about 47 (i.e. born in 1964). Assuming there are no major changes to the population structure in the near future, the median voter will have been born in 1975 in 2022.

In about 11 years' time then, the priced out generation will make up the majority of the electorate. If there hasn't been a natural economic correction by then, it could make for some interesting politics.

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So what you have net, is a much higher burden of tax on those with very high value properties in aggregate. Those people who have them can clearly afford higher taxes

Like property owning pensioners?

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Address the problem with a progressive land value tax. Let the propertied classes take the burden of taxation. It will help redress some of the great wealth imbalances in the UK. Not all of them, but it will go a long way.

Won't do a thing. The tax will just be passed onto the renters.

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The thing that is holding the UK political system together is the fact that most people born before 1975 are having few problems economically. Yes, they might gripe about the price of petrol and train fares, but the fact is the vast majority of them have stable housing with a driveway to park their car on, and a job to commute to which pays enough for them to maintain that lifestyle. For most under-35s that lifestyle is a fantasy, but there are simply not enough of them for politicians to care.

Was born in 1975. Older brother has a mortgage on a four bed newbuild in the south. I can only dream of something similar :(

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Not so fast Bogbrush.

;)B)

First of all you have to remember that a higher tax on something like Land Value, allows you to reduce taxes elsewhere. In particular I was thinking that you could reduce income tax, that being a big one. So it isnt a case of one tax on top of another.

So what you have net, is a much higher burden of tax on those with very high value properties in aggregate. Those people who have them can clearly afford higher taxes, but at the margin they will eventually get squeezed, and that will stop them pricing out the little people.

The little people will find that they pay less tax overall, and they may find that due to lower demand for property and land from richer people, they can afford their own plot whereas they couldnt before. If LVT is progressive, their overall tax position after buying some land that the rich can no longer buy, will leave them better off.

I know the arguments but it would never work out like that. Wealth tax would drop neatly on top of income tax because .....well Injin has explained it all a thousand times.

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Jennifer Warner from Globrix.com said: “Many young people who want to get on the property ladder have accepted that they will be much older by the time they finally do. A significant portion have given up the dream altogether.

“What we’re seeing is a major generational shift towards the realisation that buying your own home will be an elite rather than a mainstream lifestyle choice in the coming decades, and to a large extent only those with wealthy parents who can contribute towards a deposit will be able to buy a place of their own

VI scaremongering from a property sales website - "buy now or be locked into serfdom forever - property is special + only ever goes etc" It's a variation on the "missed the boat" theme.

All of which presupposes that the "elite" either want to live in a 2 bed flat on the outskirts of Watford or want to tie up their money in an illiquid asset generating returns comparable to a 1/2 decent savings account.

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yep. 70% of the population is an elite....or maybe its the renters who are the elite.

either way, the writer clearly has a copy of the Famous Precision Bloo Loo patented economy predictor....tulip bulb edition....

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;)B)

I know the arguments but it would never work out like that. Wealth tax would drop neatly on top of income tax because .....well Injin has explained it all a thousand times.

funny, we have a wealth tax and an LVT based on imputed rent and income tax is fck loads lower over here than there

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Won't do a thing. The tax will just be passed onto the renters.

Ah ha, that doesnt compute. Because it is progressive, the more properties you own, the higher the amount you pay.

I dont know how it will work in practice, but it might be something like this.

1 home - value £100,000 - LVT of £500

10 homes - value £1,000,000 - LVT £25,000

So the average tax goes from 0.5%, up to 2.5% per year because of the progressive nature of the tax. You can play around with any values you like, but say at £5 million, the tax rate goes up to 10%. That has to hurt.

In the example it means it is cheaper for 10 people to own 10 homes, than it is for 1 person to own 10 homes. So if you have the latter structure where homes are being rented, it costs everyone more. The laws of economics will mean that landlords would then have an economic advantage in selling, and renters and advantage in buying rather than remaining in the rented paradigm that I think we would all like to avoid.

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;)B)

I know the arguments but it would never work out like that. Wealth tax would drop neatly on top of income tax because .....well Injin has explained it all a thousand times.

Is this the same Injin who believes all money is borrowed into existence and that you dont borrow money on a credit card?

In a rare lapse, Injin himself pointed out his very nature.

However, if you were to explain it to me how there would be one tax on top of another, I would read it diligently. I do agree with you to an extent, governments always like to tax more and more, it is in their nature. Doesnt mean that they always will though.

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Even with falling house prices I fear she'll be proved correct.

I think this is unlikely. The argument is there are hordes of LLs standing in the wings waiting to "pick up a bargain". I disagree as I don't think there are anything like the number of cash buyers out there needed to make an effect. Hence the wannabe rent seekers are going to need finance. With the problems in the job market, BTL is an additional risk. You are much better off with an owner occupier as you are dealing with the person holding the debt and paying the mortgage, rather than dealing with the person holding the debt and another paying the debt about whom you have no knowledge. Also the owner occupier has a far greater vested interest in paying down the debt as there will be emotional as well as financial ties involved. A renter might trash a property, an LL might decide to pack it all in and declare bankruptcy.

Anyway, as others have pointed out the damage has been done. I am in my early thirties, I can only afford to buy due to an inheritance. Had house prices remained at sane levels I would have been able to purchase after saving for two or three years to get a decent deposit and would probably have enough disposable left over to help boost the economy through consumption. Without the inheritance my wife and I would also be unable to afford children. My generation (late 70s, early 80s) has been completely screwed over. There was no boom for us. I think late 80s, early 90s kids whilst having a tough few years now, maybe well placed later on (assuming they can get a job).

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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