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Guardian Highlights Plight Of Ftbs

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http://money.guardian.co.uk/weekly/story/0...1587196,00.html

Letters

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What you say about Sipps

Saturday October 8, 2005

The Guardian

House price inflation is the only explanation

When I first read about Sipps last year I felt like crying. I was living in London earning around £30,000 in the private sector, I couldn't afford anywhere half-decent and I wasn't about to pay an inflated price for some hole. It was immediately obvious that a side-effect of this handsome gift to the rich would be house price inflation. On reflection, Sipps are so astounding, and house price inflation so politically desirable, that it can only be explained as a policy designed to create house price inflation.

Billions of pounds of cheap money are going to get thrown at the bottom end of the housing market.

Any fool schooled in Thatcher-Brown monetarism will tell you that's going to create inflation.

Meanwhile, of course, the economic role of those who would have bought the properties is to rent them - so, in fact, you have to have an inflated property market to create the private sector rental market! That's neat but it concentrates property ownership, rather than broadening it, which, let us remind ourselves, is the government's aim - restated last week in Brighton. Assuming what they say is what they mean.

Let's count the ways I'm paying for other people's housing. I'll soon be subsidising the wealthiest people to buy more property with their pension funds. I'm subsidising the creation of keyworker ghettoes (a need only created by rampant house-price inflation - see above) and the destruction of the countryside in the process.

I'm subsidising housing associations (and the dubious housing action trusts - Hats), I'm subsidising council tenants. About 35% of my post-tax income goes in rent to pay for my landlord's ownership of the property in which I live. No wonder I can't afford to buy anywhere.

Now I've done something entirely different. I've moved out of London and taken a low-paid job working for a cause I really believe in. I've given up any expectation of owning property in the next few years.

The only good thing about this is that at least I won't be forced to sell up to pay for my care in my old age. There might be some poetic justice if the rich ended up paying for me - but I expect they won't.

Ian Bailey

Forres, Moray

Astonishment that's prevented an outcry

The new Sipps regime will make a bad situation worse. This will be true over the whole area of buy-to-let, where the same effects are felt by first time-buyers in towns and cities.

I agree with Rebecca Thackray (last week's Your Shout) that at least part of the reason for lack of a huge outcry has been sheer astonishment at the regressive nature of these Sipp tax benefits. The majority of the population are unaware of this. The government has certainly not highlighted the effects of the new Sipps (unless I missed it in the election manifesto).

Bearing in mind the large income tax decreases that the very top earners have enjoyed for some years now, I would ask the Guardian to please attempt to get a clear statement as to why a Labour government is doing this. A reply that it is just a "tidying-up" operation would be insulting.

Peter Dunn

Northolt, Middlesex

Does the government know what it's doing?

So the government wants to relax the pension investment rules from April 6, 2006, to allow tax relief up to £215,000 each year for any individual taxpayer buying buy-to-let flats here, jet-to-let properties aboard, or even vintage cars or fine wines and putting them into a Sipp personal pension. But does it understand the implications?

If a high earning top-rate taxpayer, for example, buys a £215,000 flat in his Sipp for a child to live in at university, he will get £86,000 of the purchase price paid by all other taxpayers, be able to sell the flat on three or four years later at the full market price, and pay no capital gains tax because the property is held within a tax-free fund.

I raised my concern about the likely loss of tax revenue in January. The Treasury then said about 200,000 people currently hold Sipps. But on industry estimates they already hold some £35bn of assets and rising. Even if only another 40,000 taxpayers take advantage of the new rules and buy a property costing £50,000 each, ministers would be granting £2bn of extra tax relief. Much more than the £250m over four years in the Treasury budget.

Lord Oakeshott

Lib Dem pensions spokesman Kipper

Some of the assumptions upon which these fears are based may not be accurate but the mainstream press giving space to these sentiments has to be a good thing.

Edited by Baz63

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Let's count the ways I'm paying for other people's housing. I'll soon be subsidising the wealthiest people to buy more property with their pension funds. I'm subsidising the creation of keyworker ghettoes (a need only created by rampant house-price inflation - see above) and the destruction of the countryside in the process.

I'm subsidising housing associations (and the dubious housing action trusts - Hats), I'm subsidising council tenants. About 35% of my post-tax income goes in rent to pay for my landlord's ownership of the property in which I live. No wonder I can't afford to buy anywhere.

I like this analysis in particular.

As a young single man with no children, the taxes I pay to this country are propping up this entire sham.

How do you fight back ?

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As a young single man with no children, the taxes I pay to this country are propping up this entire sham

i know what he means. all last week i had really nasty calls and two letters from the vat office, greedily chasing me as the accountant was a few days with the return. (which we can be)

i was left thinking.

am i the only one paying for all this new labour non job sh1t ?

when i am in the post office im the only one in the line not claiming benefits.

and when i try to make the effort the vat people get totally on your case for their money.

do they chase the btl crowd as much as this.?

when do i get my share of the tax spend benefits ?

or does it just simply go directly to the above.

i could probably make moves to shift the books outside the uk.

its really tempting to do it just to p1ss them off and go offshore.

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  • 301 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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