Thursday, February 20, 2014

Curve up or curve down though ?

Five ways to spot an up-and-coming area: The secrets of buying a property ahead of the house price curve

WTF: “The one bedroom flat was on the market for £400,000. In his time at the property, it had approximately 20 parties through the door in 40 minutes. In the end, it went to a cash buyer for £445,000.”

Posted by doomwatch @ 02:07 PM (4194 views)
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3 thoughts on “Curve up or curve down though ?

  • Tired old arguments recycled. When will this pathetic ramping have run its course?

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  • mark wadsworth says:

    That’s the funny thing.

    The Estate agents talk about “Location, location’ location” and the Homeys talk about tapping into “up and coming areas” and letting everybody else add value to the area – including the tenants who live there – and then cashing in without lifting a finger, and that’s all fine, that’s how it works in real life.

    But if you mention the merits of having land value tax on “community generated land values” or on unearned income/gains rather than on earned income, they deny that there is such a thing as “community generated land values” and that a landlord’s income is entirely “earned”, the same as the money which people earn by getting out of bed every day, paying for transport, putting up with their boss and customers, doing a proper job.

    It’s just different ways of looking at the same things.

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  • MW – Real estate owners, monopolists, and financial operators say their income is earned by their own efforts and outlays. After all they bought their property with a mortgage, and the price of their stocks and bonds reflects the capitalised value of real estate, so that what you call ‘economic rent’ is in fact a real investment cost. The farmer, the homeowner and the city land speculator say that land values depend on real costs because they had to pay good money for their properties. They say that rent, interest, and land-price gains are costs of production built into the way in which markets function

    But you seem to be saying that economic rent – the excess of market price over intrinsic cost – accruing to landowners, monopolists, and financial institutions has no counterpart in the technological requirements of production, but stems from legal and historical privileges that privatise the gifts of nature and permit monopolistic power to charge access fees over and above cost for the use of basic infrastructure, and that economies would thrive if they minimised the cost of living and doing business by becoming as rent-free as possible.

    I think the Duke of Westminster is happy that the farmer, the homeowner and the city land speculator think the way they do.

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