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ARENAPUA

This is Money: Property gap drives wealth inequality higher

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http://www.thisismoney.co.uk/money/news/article-4993874/Property-gap-drives-wealth-inequality-higher-UK.html

'The IPPR said that if similar home ownership trends continue, less than half millennials will buy a home before the age of 45 – compared to over 70 per cent of baby boomers who had done so by that age.'

Good mainstream article telling it how it is. Need more of these.

 

 

 

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2 hours ago, ARENAPUA said:

http://www.thisismoney.co.uk/money/news/article-4993874/Property-gap-drives-wealth-inequality-higher-UK.html

'The IPPR said that if similar home ownership trends continue, less than half millennials will buy a home before the age of 45 – compared to over 70 per cent of baby boomers who had done so by that age.'

Good mainstream article telling it how it is. Need more of these.

 

 

 

It's as if houses are being held for ransom by the Boomers.

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Don't expect this to get better under any Government. Reason for wealth  inequality according to this article is  pensions and house prices.

Both the Tories and Labour give special dispensation from taxes to pensions (including massive public sector ones ) and houses. Looking at the asset profile of all politicians would you expect anything else. The ten trillion of assets held in these two vehicles is sacrosanct, so we are left with the two trillion in Equity investments (the wealth extractors) to raise everything on their wish list. And you wonder why housing stock which at the turn of the century was equal to Equity investments is now triple the value. Politicians create the environment to protect their assets and pensions and create winners in the public, chiefly the retired.

Cast your mind back to the nineties when we had the cheapest house prices in our history and the lowest wealth equality gap and business was put to the fore. Sadly that was before we got a series of left wing Metro elite Governments that looked after number one.

Edited by crashmonitor

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13 hours ago, Thorn said:

It's as if houses are being held for ransom by the Boomers.

yes that is exactly what is happening...next it will be drinking water or food.

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3 hours ago, TheCountOfNowhere said:

And what drives property prices.....MONETARY POLICY.

Osborne, bless him, pointed this out as soon as he was sacked...after driving the inequality warp factor 11.

DMkcMIfXkAAmX2K.jpg

Given that Carnochio has already gifted £87bn in helicopter money to various banks, MMMFs and hedge funds in the City of London through the Term Funding Scheme since September 2016, it's a wonder the Tories haven't made him Chancellor as well as Governor.

http://www.bankofengland.co.uk/markets/Pages/apf/default.aspx

Quote

Asset Purchase Facility results

The table below shows the outstanding stock of holdings from gilt purchases and from the Corporate Bond Purchase Scheme. It also shows the loans made through the Term Funding Scheme. All transactions have been financed by the creation of central bank reserves.

These data are as at close Wednesday 18 October (on a settlement date basis, net of any redemptions). Gilt purchases and loans made through the Term Funding Scheme are updated weekly at 3pm on Thursdays, corporate bond purchases are updated on the first Thursday of the month at 3pm.

Gilt purchases £434,956 million
Corporate bond purchases £9,991 million
Loans made through the Term Funding Scheme £87,540 million

 

A time series showing a running total of the quantity of assets purchased and loans made by the Asset Purchase Facility, financed by the creation of central bank reserves, is available in the Interactive Database (updated weekly on Fridays).

   
   
   
Edited by zugzwang

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8 hours ago, zugzwang said:

Given that Carnochio has already gifted £87bn in helicopter money to various banks, MMMFs and hedge funds in the City of London through the Term Funding Scheme since September 2016, it's a wonder the Tories haven't made him Chancellor as well as Governor.

:lol:

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Surely the issue is IHT as much as it is high property prices?

The fact that property enjoys generous ta breaks no doubt contributes to its attractiveness and use as an inter generational tax free transfer of wealth. 

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1 hour ago, adarmo said:

Surely the issue is IHT as much as it is high property prices?

The fact that property enjoys generous ta breaks no doubt contributes to its attractiveness and use as an inter generational tax free transfer of wealth. 

Seem to recall that fru-gal and I both had a similar view following the announcement of a big change in IHT, where family home is being excluded to a certain value point....

... it was one way for Conservatives to appeal to HPI-minded voters/owners of higher value homes, for their votes.

Perception.   

The change to much higher IHT allowance (home) It does make it appear like Gov/HMRC etc all are behind huge transfers of tax-free property wealth.

And possibly could create a new surge of buyers willing to pay top whack prices (Gov is behind us with HPI/IHT).

However overall, if market turns, a higher IHT allowance, by itself, doesn't protect the HPI / wider house prices.

Of course it also seems to allow some owners to sell for some time, without the IHT payable that previously the would have incurred, and pass those mad-gainz on to members of family with no/less tax, just as you say.  With prices at these levels around us, in many expensive areas.   They're HPI+ no-tax/less tax winners for the moment, with sale prices being achieved.

Yet if prices fall, higher IHT allowance isn't going to protect values, imo.   I think it may have caused a spell of people being willing to pay higher prices.

 

On 04/07/2015 at 8:54 PM, fru-gal said:

Perhaps they are planning for think house prices will fall in which case raising the threshold won't make any difference but they will be seen to have been helping their voters and of course any HPC can be blamed on Greece/implosion of the Euro(pe). IHT is also easily avoidable and doesn't raise all that much. 

 

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7 hours ago, Venger said:

Seem to recall that fru-gal and I both had a similar view following the announcement of a big change in IHT, where family home is being excluded to a certain value point....

... it was one way for Conservatives to appeal to HPI-minded voters/owners of higher value homes, for their votes.

Perception.   

The change to much higher IHT allowance (home) It does make it appear like Gov/HMRC etc all are behind huge transfers of tax-free property wealth.

And possibly could create a new surge of buyers willing to pay top whack prices (Gov is behind us with HPI/IHT).

However overall, if market turns, a higher IHT allowance, by itself, doesn't protect the HPI / wider house prices.

Of course it also seems to allow some owners to sell for some time, without the IHT payable that previously the would have incurred, and pass those mad-gainz on to members of family with no/less tax, just as you say.  With prices at these levels around us, in many expensive areas.   They're HPI+ no-tax/less tax winners for the moment, with sale prices being achieved.

Yet if prices fall, higher IHT allowance isn't going to protect values, imo.   I think it may have caused a spell of people being willing to pay higher prices.

 

 

I agree IHT in itself doesn't stop HPI dead in its tracks but it does arrest the rate of growth of wealth inequality since it stops families snowballing wealth down the generations which was more my point. It might also have an impact if it were taxed according to other assets and it might become less of a vehicle or store of wealth and revert back to homes. 

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  • 292 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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