gingermrkettle
Deep vein trombonist
You keep telling yourself l it is that, the rest of us know it is scrimping on other saving and desperation. Wages have not gone up anything like rents which does not exactly say "ability to pay".
Interest Rate Increase
- Thread starter ks.234
- Start date
Stuart Frazer
pfm Member
That's a very simplistic model which doesn't account for many factors, such as (but not limited to):
- Limited Social Housing Supply
- Limited Number of Private Houses
- Employment/Unemployment/Job Security
- Income Levels and Wage Growth
- Mortgage Costs and Availability of Credit
- Economic Growth
- Population Growth
- Council Tax
- Maintenance Costs
All of these factors differ on location too!
Ponty
pfm Member
They’ve gone up enough for enough people for rents to increase (although in many cases not by enough to cover increased landlord costs as per my real world example).
ks.234
Half way to Infinity
On the other hand inequality and poverty are increasing. Someone whose wages have been held down by £200 a week by austerity since 2008 is not going the see their wages catch up with inflation any time soon and the increase in rent or mortgage is only going to make them poorer.
Higher interest rates benefit the wealthy and cost the poorer.
ks.234
Half way to Infinity
Wherever the price settles, there is equilibrium? The invisible hand at work.
ks.234
Half way to Infinity
And hence not on the market.
Second homes are part of the problem of artificially raising house prices
Equilibrium, or a market skewed towards increasing inequality?
Stuart Frazer
pfm Member
The Fairer Share proposal is to replace Council Tax with a 0.48% Proportional Property Tax. Tenants wouldn’t be responsible for this, only Landlords. Second Homes and Airbnb’s would be charged Double Rate. Nobody is charged more than £100/month more than current Council Tax rates until the home is next sold. The £100/month extra can be deferred until equity is released from home sale for those on smaller incomes. Stamp Duty would be scrapped under this system. 77% of homes would see cheaper Proportional Property Tax bills than current Council Tax bills.
Real Levelling-Up. But no real political appetite seemingly.
fairershare.org.uk
Real Levelling-Up. But no real political appetite seemingly.
FAQs: Council Tax, Stamp Duty - Fairer Share Campaign
Fairer Share - the campaign to abolish Council Tax and Stamp Duty. Our Proportional Property Tax will benefit 18 million households up and down the country.
fairershare.org.uk
The Fairer Share proposal is to replace Council Tax with a 0.48% Proportional Property Tax. Tenants wouldn’t be responsible for this, only Landlords. Second Homes and Airbnb’s would be charged Double Rate. Nobody is charged more than £100/month more than current Council Tax rates until the home is next sold. The £100/month extra can be deferred until equity is released from home sale for those on smaller incomes. Stamp Duty would be scrapped under this system. 77% of homes would see cheaper Proportional Property Tax bills than current Council Tax bills.
Real Levelling-Up. But no real political appetite seemingly.
FAQs: Council Tax, Stamp Duty - Fairer Share Campaign
Fairer Share - the campaign to abolish Council Tax and Stamp Duty. Our Proportional Property Tax will benefit 18 million households up and down the country.
Not sure how asset-rich, cashflow-poor owners would be classified. The report mentions this:
No one will have to sell their home. If you cannot pay in the short term you can defer the tax (paying a modest interest rate).
Is there any more info on that?
Darth Vader
From the Dark Side
There again you make baseless assumptions. This is a 3.6% increase on the previous year’s total.
We shall see next October when the new figures are released as to how many more properties are empty.
There is nothing that is "artificially raising house prices". Its just demand and supply and in our case globalisation that allows rich foreigners to buy up the UK including our best businesses on the cheap.
DV
ks.234
Half way to Infinity
Bit rude.
That multiple home ownership has increased over time is hardly an assumption and certainly not baseless.
“multiple property ownership remains a minority sport, but one growing in popularity and with the potential to significantly boost wealth and income”
House prices have been artificially increased by selling off social housing and not replacing it. This was policy choices, not an economic necessity born of a natural process
The idea that is just supply and demand as if it is some sort of natural tendency towards equilibrium is itself an assumption, a very old one, and one that has been associated with the interests of the wealthy
Homes sweet homes – the rise of multiple property ownership in Britain • Resolution Foundation
www.resolutionfoundation.org
Mike Reed
pfm Member
You forgot the banks. Inequality and poverty have always been part of global societies and shall continue as equality in humankind, unknown up to now, would not be achievable except in specific tribal groups which rarely exist nowadays.
Why should wages equal inflation? It can add to it, but there's no rationale in matching it; thereby hangs economic chaos in a free market. Rental costs are driven by paucity of supply, much as in housing.
Sth I believe wholeheartedly in; it's not what you earn; it's what you spend. Spending as if there's no tomorrow became a fashion during the seventies and escalated so that most of those under, say, 45, have been accustomed to a lifestyle which is lavish compared to previous decades. Two of my daughters are exemplars of that mindset, but also believe that the state, a.k.a. the taxpayer, owes them a living. Can't say I blame them as I feel that there are more benefits for more situations now than ever before.
A big readjustment is desirable, but with the current global chaos and the biggest threat to mankind, global warming, accelerating faster than prophesied, readjustment might take another form from simple prudence and balancing one's expectancies.
Without wages going up, how many times do you think people will be able to readjust?
Bob McC
Living the life of Riley
Well HMRC are charging 7.75% on late payment of Inheritance Tax…
ks.234
Half way to Infinity
Not sure what you mean. The BoE has an obvious role in Interest rates and is sitting on £billions of reserves thanks to QE which could be mobilised, so the Bank has a vested interest in keeping rates high as it earns interest on reserves. Which merely underlines the fact that higher interest rate benefit the rich and harm the poor
We’re not talking about absolute equality but growing inequality. The two things are very different. While absolute equality is unobtainable, policy choices to increase or decrease economic inequality are being made and have been made.
Further, the current choice to increase economic inequality is the cause of poor economic outcomes and contrary to the stated aims of creating growth (even in the limited terms of growth in GDP) because our adherents of equilibrium models downplay the multiplier effect and don’t count the downsides of the balance sheet
Social justice is just as important, having growing numbers of sick people is not good for the economy
Because if wages don’t match inflation that is a real terms wage cut
Not sure about rationale, but the BoE targets 2% inflation thereby targeting a policy to keep prices rising.
Yes, the two are obviously connected
If you don't have the money, you cant spend it, hence the increase in poverty, food banks and other markers of growing economic stress
Not everyone has your Lavish lifestyle.
I don't know anyone whole believes the state owes them a living, even less ‘the taxpayer’ who funds nothing.
Now I’m confused. You seem to be justifying current economic policy, but end up saying it needs to change.
Of course it needs to change, everything I’ve said is about the existential need for real, urgent and radical change
Our economy is sick, our people are sick and our planet is sick.
All three are intimately connected
Ponty
pfm Member
The Fairer Share proposal is to replace Council Tax with a 0.48% Proportional Property Tax. Tenants wouldn’t be responsible for this, only Landlords. Second Homes and Airbnb’s would be charged Double Rate. Nobody is charged more than £100/month more than current Council Tax rates until the home is next sold. The £100/month extra can be deferred until equity is released from home sale for those on smaller incomes. Stamp Duty would be scrapped under this system. 77% of homes would see cheaper Proportional Property Tax bills than current Council Tax bills.
Real Levelling-Up. But no real political appetite seemingly.
FAQs: Council Tax, Stamp Duty - Fairer Share Campaign
Fairer Share - the campaign to abolish Council Tax and Stamp Duty. Our Proportional Property Tax will benefit 18 million households up and down the country.
Snag is, if you increase input costs of a business (eg to landlords or holiday home providers), that only ends up in one place. They tried passing tenant fees to landlords, they just got added to the rent. I rent a place out with council tax included. Guess what, the rent is correspondingly higher, plus a bit for the added risk. Fine, slap on a property tax for landlords. Doesn’t matter if it‘s allowed to be partly deferred, the liability will be recouped at the time of consumption.
Govts need to understand that all actions have consequences, generally unintended. We’ve seen it time and time again when it comes to housing. Govt ‘help’ generally increases end user costs. I can’t think of a situation when it hasn’t.
gingermrkettle
Deep vein trombonist
You have just shown that there is effectively no price elasticity of demand when rents go up, as if there was the rises to tenants would be less than the cost rises. Tell us why landlords should never bear any of the extra costs when other businesses do?
Ponty
pfm Member
The proposed tax replaces council tax, so would simply be added to the rent. The tenant is paying it under the current system as an additional cost, as do owner occupiers.
When businesses bear additional costs, they either pass those costs on or profitability reduces / go out of business.
gingermrkettle
Deep vein trombonist
I think pretty much every tenant could live with that if it meant a lower cost of living, and I suspect landlords don't rank very highly on most people's sympathies.