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Letter In Today's Independent

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Sir: The Halifax Bank says we are currently experiencing "the largest intergenerational transfer of housing wealth in history", and accuses the Government of cashing in on what it probably assumes is a social good ("Boom in house prices 'to drive inheritance tax up to £5.6bn' ", 18 March).

Though inheritance tax is an unsavoury but effective fund-raising tool, it is also a much needed check on the cementing of class position and obstruction of social mobility. The latter is an unrecognised consequence of the housing boom. Buying a first home is becoming ever more dependent on the property status of the generation before. Such is the size of average first-time deposits in most areas, property in the family - parents' credit ratings or inheritance from the sale of their house at death - is now defining the difference between joining the home-owning class and not.

The long-term effect of this on society is that those with capital assets in property now will always ensure their children have such assets; those families with no stake in property now will more than likely have no stake in the next generation, or the one after that.

In an economy almost exclusively orientated around the property-owner, and with educational opportunities often dictated by house location, the prospect of a propertied and un-propertied class-based society, with no movement between the two, is becoming ever closer. Inherited wealth is, after all, unearned wealth, and capital from the sale of a house bought 30 years ago is even more unearned. If this Labour administration is shy of taxing high incomes, it should at least keep redistributing wealth for which no one has worked.

The unchecked passage of wealth from property, from one generation to the next, used to be termed "old money". The property boom has left us in danger of returning to a society defined by "old money" and "who your father was". As disagreeable as it is, inheritance tax is a crucial longstop to our current slide in this depressing direction.

PHILIP LOCKLEY

OXFORD

http://comment.independent.co.uk/letters/article353255.ece

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Where is that Halifax quote from, I want a link to it so badly!

How badly???

Oh go on then, it's in this press release;

http://www.hbosplc.com/media/pressreleases...06-03-18-00.asp

Halifax forecasts that this increase in IHT revenue will coincide with the largest intergenerational transfer of housing wealth in history. The Halifax estimates that £360bn, in today's money, of housing wealth will pass from one generation to another during the period 2006-20.

:)

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Nice find and an excellent point well made by Lockley.

But, the current boom is only a temporary phenomena, if one accepts bubble theory. Which means the impact on society in terms of mobility and creating a propertied class based society will be negligible.

If prices are still as high in 20 years time then an inflexible propertied class based society will no doubt be created.

My own prediction is prices reverting to their long term mean in 3 years and troughing in 5-7.

Call me an optimist?

Edited by Baz63

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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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