How to reduce house prices!
How can we reduce housing prices?
With more and more and people unable to afford their own home (64% of young people between the ages of 25 - 36, and 87% of people under 25) we need to find a way to reduce house prices.
There are many 'part buy' schemes at the minute that are making a small dent in helping people get on the housing market but there is no real ideas that can solve the problem.
Housing prices have risen a huge 428% in the last 30 years since the last generation, a figure that dwarfs that of inflation and wage increases.
There are many factors in this rise, none more so than the selling off of the social housing in the 80's/90's that gave rise to the landlords, eventually limiting the supply of housing stock.
What if we imposed a levy on house ownership that applies an increased rate of tax on people owning 3 or more properties?
A 50% tax on fourth properties owned by individuals and companies would release a lot of the housing stock back onto the market reducing housing to an affordable level.
I do realise the problems involved with such a scheme such as negative equity and so forth but if the scheme was phased in over a long period then maybe it's workable.
Bringing housing prices in line with earnings would also help drive lending and mortgages.
I have more to say on this matter but I have to leave at the minute.
Comments welcome.
With more and more and people unable to afford their own home (64% of young people between the ages of 25 - 36, and 87% of people under 25) we need to find a way to reduce house prices.
There are many 'part buy' schemes at the minute that are making a small dent in helping people get on the housing market but there is no real ideas that can solve the problem.
Housing prices have risen a huge 428% in the last 30 years since the last generation, a figure that dwarfs that of inflation and wage increases.
There are many factors in this rise, none more so than the selling off of the social housing in the 80's/90's that gave rise to the landlords, eventually limiting the supply of housing stock.
What if we imposed a levy on house ownership that applies an increased rate of tax on people owning 3 or more properties?
A 50% tax on fourth properties owned by individuals and companies would release a lot of the housing stock back onto the market reducing housing to an affordable level.
I do realise the problems involved with such a scheme such as negative equity and so forth but if the scheme was phased in over a long period then maybe it's workable.
Bringing housing prices in line with earnings would also help drive lending and mortgages.
I have more to say on this matter but I have to leave at the minute.
Comments welcome.
Scroll to see replies
Build more houses.
Posted from TSR Mobile
Posted from TSR Mobile
Original post by CycleofSpin
I'm sure The Green Party love you
I agree, this is and would relieve the housing crisis in terms of supply but it wouldn't really bring down the prices.
As the old properties become vacant, landlords would still purchase many of the properties to add to their portfolios.
Plus, the costs involved in new properties would mean that they would still need to sell for today's market price.
Build more, stop spending so much time promoting buy-to-let and reduce demand by making renting more affordable, more secure and attacking the 'right' to home ownership.
less people.
Original post by zippity.doodah
less people.
Nuke Bradford and Leeds. I agree with Zippy.
I actually like this idea. Although I think this should only be so to foreign investors, not British natives.
(edited 9 years ago)
Raise interest rates.
Abolish the 50% council tax reduction for unoccupied property.
Introduce a new unoccupied premium tax in addition to the existing council tax.
Introduce legislation to ensure tenants have the right to a minimum tenancy period of 2 years with rental rates fixed for the duration and a 3 month notice period to vacate thereafter.
Introduce a new property investment tax for multiple home ownership, calculated on the current value of the whole property portfolio.
Increase the capital gains tax for the sale of property which is not the residential home of the owner. Leave the inheritance tax on the sale of the residential home in cases of probate.
Introduce tax incentives for development of brownfield sites.
Allow a 6 month deadline to implement the changes with a date set in stone.
Abolish the 50% council tax reduction for unoccupied property.
Introduce a new unoccupied premium tax in addition to the existing council tax.
Introduce legislation to ensure tenants have the right to a minimum tenancy period of 2 years with rental rates fixed for the duration and a 3 month notice period to vacate thereafter.
Introduce a new property investment tax for multiple home ownership, calculated on the current value of the whole property portfolio.
Increase the capital gains tax for the sale of property which is not the residential home of the owner. Leave the inheritance tax on the sale of the residential home in cases of probate.
Introduce tax incentives for development of brownfield sites.
Allow a 6 month deadline to implement the changes with a date set in stone.
(edited 9 years ago)
Original post by mojojojo101
Build more, stop spending so much time promoting buy-to-let and reduce demand by making renting more affordable, more secure and attacking the 'right' to home ownership.
Renting is linked to house prices.
But in response to the OP, I'd rather not see my investment in an asset slashed.
Who says it's harder to buy a house.
(edited 9 years ago)
Original post by padgett11
I'm sure The Green Party love you
I agree, this is and would relieve the housing crisis in terms of supply but it wouldn't really bring down the prices.
As the old properties become vacant, landlords would still purchase many of the properties to add to their portfolios.
Plus, the costs involved in new properties would mean that they would still need to sell for today's market price.
I agree, this is and would relieve the housing crisis in terms of supply but it wouldn't really bring down the prices.
As the old properties become vacant, landlords would still purchase many of the properties to add to their portfolios.
Plus, the costs involved in new properties would mean that they would still need to sell for today's market price.
I disagree. The laws of supply and demand are immutable. Landlords may buy more houses at a reduced prices, yes the laws of supply and demand dictate that. But the laws of supply and demand also dictate that first time buyers can buy more at lower prices, and the market price is lower so the rents landlords can charge are lower, and landlords also sell properties so the prices they sell for are lower.
What it really boils down to is this. The modern monetary system is flexible beyond belief (some would argue too flexible to withstand human nature not planning for the long term). The point is that house prices could easily be taken down but people with a vested in interest I.e. Homeowners who don't want to upsize: the baby boomers don't want to lose their pension pot which you need to pay for when you want a home.
Posted from TSR Mobile
I don't think reducing house prices by a change in demand is really a good thing, it just means less people are able to buy houses, resulting in massive social costs. The only demand-side factor which I see as possibly fair is to reduce immigration. They want to produce 240,000 houses a year by 2016, sounds unsustainable to me, yet net migration was up to 298,000 Sept 2014, so surely a lot of this demand is coming from that. It's not that I'm against migration like some kind of fascist, I'm usually all for free movement, but if this housing crisis is to become out of control, surely cutting some migration would help reduce this a lot.
I agree with taxation on those with multiple properties. Vacant properties especially should be utilised and not simply held by foreign investors. Recent govt statisics suggested 610,000 houses are vacant, 200,000 of these long term. Again this would help relieve a lot of the problems.
I agree with taxation on those with multiple properties. Vacant properties especially should be utilised and not simply held by foreign investors. Recent govt statisics suggested 610,000 houses are vacant, 200,000 of these long term. Again this would help relieve a lot of the problems.
Original post by CycleofSpin
I disagree. The laws of supply and demand are immutable. Landlords may buy more houses at a reduced prices, yes the laws of supply and demand dictate that. But the laws of supply and demand also dictate that first time buyers can buy more at lower prices, and the market price is lower so the rents landlords can charge are lower, and landlords also sell properties so the prices they sell for are lower.
What it really boils down to is this. The modern monetary system is flexible beyond belief (some would argue too flexible to withstand human nature not planning for the long term). The point is that house prices could easily be taken down but people with a vested in interest I.e. Homeowners who don't want to upsize: the baby boomers don't want to lose their pension pot which you need to pay for when you want a home.
Posted from TSR Mobile
What it really boils down to is this. The modern monetary system is flexible beyond belief (some would argue too flexible to withstand human nature not planning for the long term). The point is that house prices could easily be taken down but people with a vested in interest I.e. Homeowners who don't want to upsize: the baby boomers don't want to lose their pension pot which you need to pay for when you want a home.
Posted from TSR Mobile
Not sure where your going with that, but house prices are primarily high because of the lack of housing stock on the open market.
New builds are built at a cost that demands a decent profit which is way above the pay scale of the common man.
20% of all housing is owned by landlords in the UK, a further 6% are left empty. Put even 5% of these properties on the open market and a significant reduction in price is inevitable.
Nearly 70% of all residents requiring housing accommodation cannot afford to buy outright. The only way this can change is if the market comes down in price. The only way that lending on mortgages can increase is if they are affordable and manageable to all levels of pay-scale.
The housing stock that would be available to those on the lower end of the pay-scale is mainly the ones on the estates, of which 68% of former council owned properties now belong to landlords. It's these properties that people would be able to afford if there was a significant reduction in landlords.
Original post by padgett11
How can we reduce housing prices?
With more and more and people unable to afford their own home (64% of young people between the ages of 25 - 36, and 87% of people under 25) we need to find a way to reduce house prices.
There are many 'part buy' schemes at the minute that are making a small dent in helping people get on the housing market but there is no real ideas that can solve the problem.
Housing prices have risen a huge 428% in the last 30 years since the last generation, a figure that dwarfs that of inflation and wage increases.
There are many factors in this rise, none more so than the selling off of the social housing in the 80's/90's that gave rise to the landlords, eventually limiting the supply of housing stock.
What if we imposed a levy on house ownership that applies an increased rate of tax on people owning 3 or more properties?
A 50% tax on fourth properties owned by individuals and companies would release a lot of the housing stock back onto the market reducing housing to an affordable level.
I do realise the problems involved with such a scheme such as negative equity and so forth but if the scheme was phased in over a long period then maybe it's workable.
Bringing housing prices in line with earnings would also help drive lending and mortgages.
I have more to say on this matter but I have to leave at the minute.
Comments welcome.
With more and more and people unable to afford their own home (64% of young people between the ages of 25 - 36, and 87% of people under 25) we need to find a way to reduce house prices.
There are many 'part buy' schemes at the minute that are making a small dent in helping people get on the housing market but there is no real ideas that can solve the problem.
Housing prices have risen a huge 428% in the last 30 years since the last generation, a figure that dwarfs that of inflation and wage increases.
There are many factors in this rise, none more so than the selling off of the social housing in the 80's/90's that gave rise to the landlords, eventually limiting the supply of housing stock.
What if we imposed a levy on house ownership that applies an increased rate of tax on people owning 3 or more properties?
A 50% tax on fourth properties owned by individuals and companies would release a lot of the housing stock back onto the market reducing housing to an affordable level.
I do realise the problems involved with such a scheme such as negative equity and so forth but if the scheme was phased in over a long period then maybe it's workable.
Bringing housing prices in line with earnings would also help drive lending and mortgages.
I have more to say on this matter but I have to leave at the minute.
Comments welcome.
Personally i'm very much opposed to punishing those that have more than one home, especially when they may be landlords ect.. and already pay tax (plus they pay stamp duty anyway).
There are two factors we need to deal with (house prices don't need to fall though, just be lower than real wage growth)..
1) Inflation of the household credit supply means that people are getting mortgages at a higher price level then they should be, we know this because in 2010-2012 mortgage lending fell to levels seen in the 70's and in almost every region prices were declining slowly. We can do this by getting government out of the credit market and making people save bigger deposits as a result. Or we can raise interest rates.
2) Underlying the base that household credit inflation pushes up is a genuine issue of rising population vs insufficient house building. Now we could abolish planning constraints and leave the market to it but that's politically difficult so the better solution may simply be to follow the lead of Macmillan and build 1 million homes in urban counties, we can strengthen the right to buy to aid in peoples prosperity.
Oddly for those that know me i do actually agree with the need for flat house prices. Despite my love of the free market, i believe in a property owning democracy and buying a house being symbolic of aspiration and financial security. If the market is failing to provide increased rates of home ownership then the state must intervene.
(edited 9 years ago)
Problem is voters who own houses will punish any government which does anything which causes even a slight drop in house prices.
Original post by Rinsed
Problem is voters who own houses will punish any government which does anything which causes even a slight drop in house prices.
And what is the percentage of the population who own 3+ abodes? Probably a reasonable number with two, but three is a stretch.
I do want a landed gentry, however, which is why I only want to penalise foreign investors. They are the real problem here, hiking prices and getting greedy: they see a pig in the City of London, and don't care who it hurts to fatten it up for harvest. They are playing with our people for gains.
Original post by Rakas21
Personally i'm very much opposed to punishing those that have more than one home, especially when they may be landlords ect.. and already pay tax (plus they pay stamp duty anyway).
There are two factors we need to deal with (house prices don't need to fall though, just be lower than real wage growth)..
1) Inflation of the household credit supply means that people are getting mortgages at a higher price level then they should be, we know this because in 2010-2012 mortgage lending fell to levels seen in the 70's and in almost every region prices were declining slowly. We can do this by getting government out of the credit market and making people save bigger deposits as a result. Or we can raise interest rates.
2) Underlying the base that household credit inflation pushes up is a genuine issue of rising population vs insufficient house building. Now we could abolish planning constraints and leave the market to it but that's politically difficult so the better solution may simply be to follow the lead of Macmillan and build 1 million homes in urban counties, we can strengthen the right to buy to aid in peoples prosperity.
Oddly for those that know me i do actually agree with the need for flat house prices. Despite my love of the free market, i believe in a property owning democracy and buying a house being symbolic of aspiration and financial security. If the market is failing to provide increased rates of home ownership then the state must intervene.
There are two factors we need to deal with (house prices don't need to fall though, just be lower than real wage growth)..
1) Inflation of the household credit supply means that people are getting mortgages at a higher price level then they should be, we know this because in 2010-2012 mortgage lending fell to levels seen in the 70's and in almost every region prices were declining slowly. We can do this by getting government out of the credit market and making people save bigger deposits as a result. Or we can raise interest rates.
2) Underlying the base that household credit inflation pushes up is a genuine issue of rising population vs insufficient house building. Now we could abolish planning constraints and leave the market to it but that's politically difficult so the better solution may simply be to follow the lead of Macmillan and build 1 million homes in urban counties, we can strengthen the right to buy to aid in peoples prosperity.
Oddly for those that know me i do actually agree with the need for flat house prices. Despite my love of the free market, i believe in a property owning democracy and buying a house being symbolic of aspiration and financial security. If the market is failing to provide increased rates of home ownership then the state must intervene.
House prices don t need to drop??
What background are you from bud! Sorry, but that shows a big ignorance in respect to the working class which make up the mode majority in the country.
In the northern counties the average wage is £26 000. But this is the mean average. The mode average is less than £20 000! and that is just for those in permanent employment.
House prices average nearly 6 times that of the average wage. 25 year mortgages are usually given for 3 times that of earnings. Hence, house prices need to be halved to service more than 50% of the country!
And then they need to be lower than real wage growth!
Original post by padgett11
House prices don t need to drop??
What background are you from bud! Sorry, but that shows a big ignorance in respect to the working class which make up the mode majority in the country.
In the northern counties the average wage is £26 000. But this is the mean average. The mode average is less than £20 000! and that is just for those in permanent employment.
House prices average nearly 6 times that of the average wage. 25 year mortgages are usually given for 3 times that of earnings. Hence, house prices need to be halved to service more than 50% of the country!
And then they need to be lower than real wage growth!
What background are you from bud! Sorry, but that shows a big ignorance in respect to the working class which make up the mode majority in the country.
In the northern counties the average wage is £26 000. But this is the mean average. The mode average is less than £20 000! and that is just for those in permanent employment.
House prices average nearly 6 times that of the average wage. 25 year mortgages are usually given for 3 times that of earnings. Hence, house prices need to be halved to service more than 50% of the country!
And then they need to be lower than real wage growth!
I'm almost certainly poorer than you and from West Yorkshire. But there's no way politically or economically that you can halve house prices without screwing millions of people who would be over leveraged and now in negative equity.
All one needs to is ensure house prices are roughly flat, as real wages rise faster than house price growth affordability over time will increase. It's slow but it would work.
Original post by padgett11
How can we reduce housing prices?
With more and more and people unable to afford their own home (64% of young people between the ages of 25 - 36, and 87% of people under 25) we need to find a way to reduce house prices.
There are many 'part buy' schemes at the minute that are making a small dent in helping people get on the housing market but there is no real ideas that can solve the problem.
Housing prices have risen a huge 428% in the last 30 years since the last generation, a figure that dwarfs that of inflation and wage increases.
There are many factors in this rise, none more so than the selling off of the social housing in the 80's/90's that gave rise to the landlords, eventually limiting the supply of housing stock.
What if we imposed a levy on house ownership that applies an increased rate of tax on people owning 3 or more properties?
A 50% tax on fourth properties owned by individuals and companies would release a lot of the housing stock back onto the market reducing housing to an affordable level.
I do realise the problems involved with such a scheme such as negative equity and so forth but if the scheme was phased in over a long period then maybe it's workable.
Bringing housing prices in line with earnings would also help drive lending and mortgages.
I have more to say on this matter but I have to leave at the minute.
Comments welcome.
With more and more and people unable to afford their own home (64% of young people between the ages of 25 - 36, and 87% of people under 25) we need to find a way to reduce house prices.
There are many 'part buy' schemes at the minute that are making a small dent in helping people get on the housing market but there is no real ideas that can solve the problem.
Housing prices have risen a huge 428% in the last 30 years since the last generation, a figure that dwarfs that of inflation and wage increases.
There are many factors in this rise, none more so than the selling off of the social housing in the 80's/90's that gave rise to the landlords, eventually limiting the supply of housing stock.
What if we imposed a levy on house ownership that applies an increased rate of tax on people owning 3 or more properties?
A 50% tax on fourth properties owned by individuals and companies would release a lot of the housing stock back onto the market reducing housing to an affordable level.
I do realise the problems involved with such a scheme such as negative equity and so forth but if the scheme was phased in over a long period then maybe it's workable.
Bringing housing prices in line with earnings would also help drive lending and mortgages.
I have more to say on this matter but I have to leave at the minute.
Comments welcome.
In the UK 1,700 people (that is 0. 0027%) ’own’ 30% of the land area, about 36,000 (0.057%) have 50%, about 380,000 (0.6%) have 70%. Land is the only substantial untapped source of revenue in the UK (the establishment’s ‘sacred cow’?). 0.6% of the population hold about 70% of UK land. Of the remaining 30%; about 5% is urban and of that about 2% is domestic property distributed between about 16m property holders, they own individually very little land but collectively pay substantial property related taxes in an artificially restricted land market rigged in favour of those with extensive landholdings who have no incentive to sell (creating a non-existent shortage of land that inflates its price) because they are not directly taxed annually on their occupation of the nation’s major asset (a tax efficient repository for the national, non-dom and foreign rich). Land has been legally appropriated by a miniscule proportion of the population who because of our feudal system of land holding are protected from direct taxation, a situation which operates as a ‘dead hand’ on that market. The ability of the nation to directly tax land would encourage its disposal by those not making productive use of it and so create a more open market in land which citizens and entrepreneurs could take advantage of to build houses on.
Original post by padgett11
Not sure where your going with that, but house prices are primarily high because of the lack of housing stock on the open market.
There you said it. Build more, more go on the open market and the price goes down.
The business model of the developers is irrelevant.
Your argument is like saying that the Royal Mint released gold sovereigns onto the market at the gold price plus 50% but regardless of this yet still end up trading at gold spot plus 2 or 3%. The market does not care about some historical markup.
Again your point about what the "common man" could possibly afford, a slide up in price is a slide up for everyone and a slide down is a slide down for everyone.
It boils down to supply and demand. Quite simply, build more homes.
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Original post by saayagain
Kill the housing market. One home per family/adult.
Would people still be able to rent second properties if they needed properties in different areas for their personal and business life?
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