Non - House prices

The problem is seeing rising house prices as "wealth creation". My house has nearly doubled in price since I bought it 7 years ago but it's hardly wealth if everything else has correspondingly risen in value. If I needed to turn it into liquid, with a baby I'm not ready to downsize, and I'm not going to move into an equivalent house further out in a cheaper neighbourhood where I don't want to live and price out someone who really needs that place in the process.

Since 1995, 75% of all the UK's wealth creation has come from rising house prices. And people still believe they earned it.

https://www.opendemocracy.net/en/ou...-need-start-talking-about-where-wealth-comes/
 
The problem is seeing rising house prices as "wealth creation". My house has nearly doubled in price since I bought it 7 years ago but it's hardly wealth if everything else has correspondingly risen in value. If I needed to turn it into liquid, with a baby I'm not ready to downsize, and I'm not going to move into an equivalent house further out in a cheaper neighbourhood where I don't want to live and price out someone who really needs that place in the process.

Agree. Our definition of wealth is very skewed.

But, say you bought a house for £50,000 which rises to £300,000 in value, when, in the future, you do come to downsize to a house of half the value, you'll free up £150,000 rather than the £25,000 you would have freed up had it not risen in value. That's an extra £125,000 for doing nothing.

Not that it's your fault, or you're in anyway to blame. But its how an economy based on capital accumulation works - wealth is generated from 'having' rather than 'doing'.
 
The problem is seeing rising house prices as "wealth creation". My house has nearly doubled in price since I bought it 7 years ago but it's hardly wealth if everything else has correspondingly risen in value. If I needed to turn it into liquid, with a baby I'm not ready to downsize, and I'm not going to move into an equivalent house further out in a cheaper neighbourhood where I don't want to live and price out someone who really needs that place in the process.

Yes indeed, but it's still an asset and as you know 50% increase on 500k house is a significant amount more than 50% on a 250k house over the same period.

Another thing is education around compound interest and investing. You can invest up to 20k a year into the market and not pay any capital gains. Although accept its not easy to save significant amounts for many due to increases living costs and stagnant wages. The market has produced similar returns to housing at many times over the previous century or so and no deposit is needed to start.

Again, not saying its possible for every person to do it, but self education is much more accessible than before, with the Internet.

Not ideal, but this is where we are, and there are many that spend free time upskilking or running online sidelines for additional income. Not saying its right, but if some are working average paid jobs and not doing much else to increase their value, they may be waiting a long long time for some kind of event that brings us back to where we were in previous generations.
 
Home owners buying second homes to rent out is the problem.
The problem is, if you chuck the tenants out onto the street and force landlords to put the houses onto the market, you probably achieve the desired effect of putting house buying into the range of more people, but you also have the effect of having a load of former tenants now homeless. Unless of course the councils are forced to spend fortunes on buying loads more council houses, and then prices go up again.

You can't increase the housing stock by abolishing rentals. The only way to increase the housing stock is to build more houses. (Down south, of course. Up north, prices are far more reasonable so we don't need the extra in the same way.)
 
Start by making it a legal requirement, for all new builds to have a garage, below the house (all over the continent, this occurs)

Build more 3-storey houses = same living space, smaller footprint

Restrict immigration, highly contentious but having seen a documentary, on the vast numbers of illegal immigrants in London alone, virtually all of whom were economic immigrants, we are going to be in a pickle with such a fast growing populace.

Murder the current holders of inherited wealth and share it out to ......Napoleon and Snowball (wait a minute, has that happened already?)

Where does social mobility stop and immigration start. Why is it okay for someone from Newcastle to migrate to Cornwall but not okay for someone from Northern France to migrate to Kent despite it being a shorter distance.

I am being deliberately obtuse, but the point is we ARE in relative terms the Wealthy Nobles who have inherited a better standard of living compared to many of the economic migrants. They haven't come here to get what the British elite want, they aspire to our ordinary lives because they can't get it where they leave behind. The more we isolate ourselves from the rest of the world, trying to be better, the more people will want to come here, that's whole driver behind the significant migration to North America. Maybe we need a PR campaign that makes us the last place people choose to come, our best kept secret.

Also, setting aside geo-politic challenges, very very simplistically it may be better for tax payers in the UK to fund British owned start-ups in other countries to create local jobs and homes that would reduce migration and potentially reverse it by levelling the playing field. Ask yourself why people come to live here, but strangely we go the opposite direction on holiday.Take the life people want to them and you probably find it's cheaper to do so than build new homes here.

We also need to reconsider our need for owning all this space. At some stage 50% of the population experience shared living at university in halls and later in life they return to that in retirement homes. Why don't 20-30 yr old shared concepts exist, separate bedrooms, but shared facilities. What percentage of every home has rooms that are used for less than 4 hours per day. How much space does every spare room in the country take up. At that age who wouldn't prefer a more social setting and the efficiency of a model that has people hired to maintain the premises.
 
Don't worry, the youngsters can also foot the bill for old people's care using NI deductions from their wages. Heaven forbid we'd tax the huge wealth generated as a quirk of when these people were born.
I don't disagree with the principle one iota, SDD, but how do we turn that paper profit on a house value into taxable cash?
 
How about a wealth tax ? If your net worth is, say, above £1 million, you pay an extra % tax to help fund our essential public services.
 
Plus speculation on rental income has to be regulated. One huge problem is banks buying houses en masse to rent out. You'll start to see it more and more in Bournemouth and the surrounding region now that it is being branded the Silicon Coast.
 
Plus speculation on rental income has to be regulated. One huge problem is banks buying houses en masse to rent out. You'll start to see it more and more in Bournemouth and the surrounding region now that it is being branded the Silicon Coast.

It's all right for you, you probably have a mansion in the Hollywood Hills.:throw:
 
Offshore banking needs to be thoroughly policed. Inheritance tax is unfair on regular self-made people.
Inheritance tax is unfair full stop.My mother has a substantial amount of money in the bank.My sisters keep telling her to get rid of some before she loses a lot to this tax.She refuses to do that because she 'always knows better as I'M YOUR MOTHER' despite we are all over 50 and both sisters work in the financial sector.
 
Since 1995, 75% of all the UK's wealth creation has come from rising house prices. And people still believe they earned it.

https://www.opendemocracy.net/en/ou...-need-start-talking-about-where-wealth-comes/

Yet the FTSE 250 index has comfortably beaten the % increase and the American markets have absolutely obliterated them since 1995. How can house prices not rise somewhat in line with stock markets? If they stagnated then everyone would just stick all their spare cash in a stocks and shares (which most people don’t do enough of anyway, especially with S&S ISAs).
 
How about a wealth tax ? If your net worth is, say, above £1 million, you pay an extra % tax to help fund our essential public services.

To be fair...there is already a wealth tax in a way. The current lifetime pension you can accrue is £1m. Everything above that is taxed at 55%. Now while people band around £1m as being a lot of money, as a pension pot for two people to retire on its not exactly going to pay for cruises on the Queen Mary every year.

I always struggle with the idea of inheritance tax. Why be complicated with "wealth tax" or one off tax hits. Just increase higher rate tax above a certain figures. Simple, easy and very few people could have any complaints.
 
Yet the FTSE 250 index has comfortably beaten the % increase and the American markets have absolutely obliterated them since 1995. How can house prices not rise somewhat in line with stock markets? If they stagnated then everyone would just stick all their spare cash in a stocks and shares (which most people don’t do enough of anyway, especially with S&S ISAs).

It's not saying house prices have risen by 75%. It's saying they account for 75% of all wealth creation since 1995.

(Unless I've misunderstood you)
 

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