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Inequality and the top 10%

Any collapse will immediately stop new builds. Could be seen as a good thing now we're getting back to ZPG.

If interest goes up towards 10% loads of businesses will fail, ours included.

We need to curtail demand for housing some way other than increasing borrowing costs.

Yes, of course there would be all sorts of other ramifications. Additional property taxation could work. 5% of the value per annum should reduce prices a bit! Trouble is, construction would be economically unviable.
 
I can think of a couple of ways of both reducing demand and increasing supply, but they are contentious and would probably have unintended consequences.

1) Ban ownership of multiple houses; impose a limit of, say a maximum of two per person

2) Force students to live at home when at college/university, unless they can prove that they live beyond reasonable daily travel of one

An ever-increasing divorce rate is also driving demand upwards. Short of banning divorce, however, I can't see how this factor can be limited.
 
I can think of a couple of ways of both reducing demand and increasing supply, but they are contentious and would probably have unintended consequences.

1) Ban ownership of multiple houses; impose a limit of, say a maximum of two per person

2) Force students to live at home when at college/university, unless they can prove that they live beyond reasonable daily travel of one

An ever-increasing divorce rate is also driving demand upwards. Short of banning divorce, however, I can't see how this factor can be limited.

I would add to your list by taxing overseas ownership of UK property seriously, not just Council Tax. 10% per annum of its perceived value should do it.
 
Islamic zakat law is fairer, your main property is untaxed, all others 2.5% per annum if empty, 2.5% of rental income if rented out. Basically a tax discouraging idle money and asset investment
 
I can think of a couple of ways of both reducing demand and increasing supply, but they are contentious and would probably have unintended consequences.

1) Ban ownership of multiple houses; impose a limit of, say a maximum of two per person

2) Force students to live at home when at college/university, unless they can prove that they live beyond reasonable daily travel of one

An ever-increasing divorce rate is also driving demand upwards. Short of banning divorce, however, I can't see how this factor can be limited.

Would you be in favour of some form of population control as well?
 
I think raising interest rates is the only way to bring down property prices (as a multiple of wages), but it would also cause a recession, company bankruptcies, and reduced public services as more government revenue would be needed to pay interest on the national debt. I think the governments and central banks have painted themselves into a low IR corner from which there is no easy escape. QE (a useful tool if it allows the government to maintain public services and pay social security) has become terribly debased with the purchase of other assets, like corporate bonds. A windfall for the 1%, crumbs for the rest.

I think that they're quite happy to see 5%+ real inflation for 2-3 years as we exit the COVID pandemic, however much they might talk about inflation targeting - but I think that will only scratch the surface of the problems.

There clearly should have been both more homebuilding, and more effort to spread the wealth geographically to ease demand in the cities and the south-east of the UK, but that ship sailed 20+ years ago.
 
Would you be in favour of some form of population control as well?

It's hard to disincentivise large families, because it's already hard and expensive enough to raise multiple children, and financial disincentives risk child welfare. You'd also need draconian immigration policies since immigration is the source of half of the UK population growth.

https://migrationobservatory.ox.ac....-impact-of-migration-on-uk-population-growth/

I think population growth is much less of a problem than economic concentration in SE England, but that's just an opinion I pulled out of my rear end - I don't have any data to back it up.
 
Would you be in favour of some form of population control as well?

In simple terms, if there were fewer people, there would be less demand. Medical science is amazing but if everyone lives to 100, scarce resources become scarcer. At the other end, only those at the top and bottom of the wealth spectrum can have big families. The vast majority in the middle can’t afford it.
 
I think you have missed the point that we currently use the idea of "meritocracy" to justify extreme wealth inequality, and there seems to be little doubt as to your friend's merit. However there is also a HUGE amount of luck involved in being successful, genes, environment, timing, geography. Further, massive wealth inequality, and lack of access to basic services like housing, good education, healthcare are extremely destabilizing to democracies, and often lead to dangerous populist governments and policies (see Brexit, Trump).

And finally, how many successful folks are really happy if they live their lives with the burden of knowing that many around them are denied the basic necessities of life, and that a run of misfortune could quickly put them in a similar situation ? I know I don't like to live this way.

Using meritocracy to justify (polices that increase) inequality is right-wing spin which started in the 80s. Trump also employed it. And I wonder how prevalent actual meritocracy is in the US when over 60% of wealth is inherited.

That aside, American society is becoming too 'stretched' and fragmented/tribal. While full of philanthropists and community spirit, the overall direction of travel seems to be more "me first" than it was in the past, which makes it harder for people to consider the plight of others.
 
Using meritocracy to justify (polices that increase) inequality is right-wing spin which started in the 80s. Trump also employed it. And I wonder how prevalent actual meritocracy is in the US when over 60% of wealth is inherited.

That aside, American society is becoming too 'stretched' and fragmented/tribal. While full of philanthropists and community spirit, the overall direction of travel seems to be more "me first" than it was in the past, which makes it harder for people to consider the plight of others.
That’s all a bit hard left.
 
The reality that has to be faced is IQ:-
LifespanDevelopment59.jpg


Today the well paid jobs are a lot more mentally and technically demanding than in the past. There are a lot of job vacancies in the UK today but they tend to require people in the right half of the above curve. That tends to leave those in the other half looking at working in service and manual type jobs and those don't pay well. Hence the 'richer' half seem to get richer than the rest as those skills are in demand. Taken to its conclusion if technology keeps advancing at such a pace it may be that only the very brightest will have a well paid job.

At some point society will have to address this situation.

Food for thought,

DV
 
Islamic zakat law is fairer, your main property is untaxed, all others 2.5% per annum if empty, 2.5% of rental income if rented out. Basically a tax discouraging idle money and asset investment

Banning hidden ownership in the U.K. would stop houses being used in money laundering, it ridiculous this is allowed to go on.
 
Banning hidden ownership in the U.K. would stop houses being used in money laundering, it ridiculous this is allowed to go on.

I found out just recently that the house we've just sold was used for this purpose years ago and by the daughter of a Lady! (as in the wife of a Lord)
 
That may be the case for many @Darth Vader but doesn't necessarily cover all, the wealthiest two people that I personally know would definitely not be anywhere near the top of the IQ scale, in fact I would describe one of them as 'pig ignorant' ,whilst the person I know with an IQ of 157 (recorded at 11 years old during the 11+ tests of the early 80's ) has been hopelessly unsuccessful in both career and monetary terms.
 
The reality that has to be faced is IQ:-
LifespanDevelopment59.jpg


Today the well paid jobs are a lot more mentally and technically demanding than in the past. There are a lot of job vacancies in the UK today but they tend to require people in the right half of the above curve. That tends to leave those in the other half looking at working in service and manual type jobs and those don't pay well. Hence the 'richer' half seem to get richer than the rest as those skills are in demand. Taken to its conclusion if technology keeps advancing at such a pace it may be that only the very brightest will have a well paid job.

At some point society will have to address this situation.

Food for thought,

DV

Apart from the fact that IQ does not determine what you can achieve and accomplish.

https://oxsci.org/iq-is-meaningless-heres-why/
 
How about addressing the empty property problem? Oct 2019 figures were 650k of which 225k were classed as long term (longer than six months). Penalising the deliberate banking of empty properties and the sequestering of long term empty properties for rental would soon see that figure reduce. Also end secret property ownership, introduce a special tax for residential properties held in limited companies where the property isn't germane to the company's business, and ban the ownership of property held in offshore tax haven companies.

All very straightforward if there is any political will, but there won't be any political will while we have a kleptocrat by proxy government funded and supported by the very people who benefit from the status quo.
 
It's hard to disincentivise large families, because it's already hard and expensive enough to raise multiple children, and financial disincentives risk child welfare. You'd also need draconian immigration policies since immigration is the source of half of the UK population growth.

https://migrationobservatory.ox.ac....-impact-of-migration-on-uk-population-growth/

I think population growth is much less of a problem than economic concentration in SE England, but that's just an opinion I pulled out of my rear end - I don't have any data to back it up.

If we take The Leftovers as a template, my guess is that demand for housing would drop following a sudden decline in population. Prices would also drop. Back in the real world, populations in an increasing number of countries, e.g. Japan, are starting to decline naturally as child rearing becomes too expensive and as people make different lifestyle choices. The 'market' is beginning to self correct. The correction though not deep and wide enough nor fast enough to impact housing prices today or in the immediate future though. House prices in Japan, for example, have risen 75% from 2010-2020, so similar to the UK. There are various things that can be done today though such as increasing supply, tackling the empty property issue, and ensuring unused land owned by developers is used. 3D printed homes are also coming. Agree, the model that made the South East successful should be 'exported' to other areas of the country. It would help the government 'level up' the country.
 


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