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Saberu

Property Speculators Will Still Earn Money In A Crash

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We all know it, the current system is flawd. And we are all talking about price crashes of 40% as a possibility but not many people have touched on the principle of land and property prices. I'm only a layman and have very little knowledge of ecnomonics so I would appreciate an answer as to why my proposal couldn't work in theory, ignoring that people wouldn't be willing to sacrafice the equity already in their properties.

The main problem with housing is (and land) is that it's a commercial item, it's price is dictated by the market. And this open plan pricing strategy has allowed banks and people alike to turn property into an investment tool and obviously also allowed the government to bribe the public. So I would argue it's the biggest issue our country (and perhaps the wider world) faces in terms of corruption as it's not just our country with rising property prices.

I propose a new system whereby all non-commercial use property is priced based on building cost, and a very minimal land cost which doesn't reflect demand and supply but just makes things affordable. And the lower cost would be ~ 25% of current property values.

This new system would have to have some controls, for example you're only allowed to buy a property (at discounted rates) if you own a British passport and you are only allowed one property at discounted rates- so any 2nd homes will have to pay a commercial rate (based on supply and demand like we have at the moment). Property letters will be able to pay the discounted rates to reflect the lower cost they would have to charge people for rent. This would completely dissolve the huge number of speculators on the property market because the amount of profit able to be made will be significantly low due to the low costs involved. There would be a dedicated policing unit to prevent property fraud, for example commercial enterprises attempting to get the discounted rates for property, people buying 2nd homes at discounted rates or people claiming to lease out second homes but in reality using it for themselves.

I would apprciate everyones opinion on my idea, I'm still not to sure about keeping commercial property at market rates because it would be a lot of hassle but I have very limited economics knowledge and I'm worried that if commercial property was discounted it would somehow screw up the economy? My finance student friend thinks that my plan would stiffle the markets and I'm breaking fundamental rules of economics by making the housing market less competitive.

The only problem I can see with my plan is that it means that people will somehow need to get all their equity out of the property market before the changes happen, and thats probably why it will never be a popular proposal.

Here are some of my other ideas for our country:

Privatise the NHS, but not under the monopolised privatisations that Labour seem to prefer.

Flat rate of tax at ~ 25% with all those little irrelevant taxes Gordon Brown made to be abolished.

Cut down central government to a minimal level and a return of more power to local councils so they can deal with local issues. I think having 25% of our population employed in the public sector is a fallacy.

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Here are some of my other ideas for our country:

Privatise the NHS, but not under the monopolised privatisations that Labour seem to prefer.

Flat rate of tax at ~ 25% with all those little irrelevant taxes Gordon Brown made to be abolished.

Cut down central government to a minimal level and a return of more power to local councils so they can deal with local issues. I think having 25% of our population employed in the public sector is a fallacy.

One small problem with privatising the NHS:

Everything.

Privatisation is just one more way to effectively subsidise the rich & redistribute wealth from the poor to to rich.

Privatisation being more cost-effective for the country as a whole is a right wing fantasy. Yes, private companies run

services cheaper than the public sector, but only because the extra cost is passed on to the people!

When buses were privatised; yes I probably paid about £100 less in tax a year....BUT I had to buy a car for £2000 &

had to Tax & Test it & had to pay £1000's per year in petrol & parking, because my bus routes were discontinued.

On the whole I lost out, as did many millions of others!

NONE of that extra cost was taken into account by the Tories!

If you add up the cost of all the Private Vehicles in the country today the amount would be staggering.

Far far far far beyond the cost of ANY public transport system that could ever be built!!!

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