Rcession

[Shaggy]

Increasing stamp duty for foreign nationals would only be remotely legal if it applied only to foreign nationals from outside of the EU, so not sure that would create a great deal of difference.

[benmorg]

lard Wrote:

-------------------------------------------------------

> What is more laughable is Kirsty and Phil's

> current crusade against stamp duty, using it as a

> reason people aren't buying at the moment.

>

> What they fail to remember is that stamp duty

> didn't stop people buying last year when prices

> were just as high.

>

> They argue a price fall is bad - when in reality

> the stamp duty of 1% can easily be "saved" by a

> price reduction of only 1%, so a 20% fall is much

> more beneficial for first time buyers than the

> scrapping of stamp duty.

>

> If anything stamp duty should have been raised

> much higher 5 years ago to stop the ridiculous

> price growth.

>

> Plus foreign nationals paying an additional 20% or

> suchlike in stamp duty.

>

> Their maths is quite staggeringly upside down, and

> such a vested interest it shouldn't be allowed on

> television.

it's interesting that kirsty and phil have done special features in their new magazine program on west london (kirsty's home) and SW London (phil's home). Oh and a presenter job for kirsty's sister and interviews with staff from Phil's property finder company about how to find properties. It's amazing they get away with such self-serving ramping and nepotism.

re stamp duty, it now looks like Labour will introduce some kind of stamp duty reform by the end of the year - either a reduction or a stamp duty holiday. K & P will doubtless claim credit.

[indiepanda]

I definately agree with the people who say people buying second homes should have to pay extra stamp duty. It's things like people buying a weekend cottage which sits empty a lot of the year that prices local people out of the village they grew up in and the facilities closing down as there aren't enough people using them regularly to make them viable. If you can afford an extra house, you can afford the tax.

I do think they should change the way stamp duty works so at the price it goes up, it should only be on the additional bit over the threshold not the whole lot, creates a real distortion at the moment. Even if the market is going up, if your house should really be worth ?255k, no one will pay that because they pay ?2,499.99 in stamp duty if they can get you to drop your price to ?249,999 and ?6,250 if they pay the asking price, which is a big difference. But putting it up overall might help price escalation.

Think some sensible controls on mortgage lending would make a real difference too - some companies have been lending money to people they really can't afford to repay. I read today something like 9 in 10 mortgage advisors are guilty of misselling, and a good percentage of those don't check the borrower can afford the repayments. Ok, people should take responsibility for their finances, but I reckon a lot of people will assume the bank wouldn't lend them the money if it wasn't affordable. And I'm sure some don't understand impact rising interest rates would have on their repayments.

[????]

Kirsty's a hideous old bag whose dad was something high up in Thames TV or something like that....whereas Sarah Beeney is a goddess who can come and have a good poke round my basement anyday

[EDOldie]

Stamp duty is probably the cheapest tax to collect hence the enthusiasm of HMG to continue with this tax on taxed income. But if the intention of new labour was to calm down the property market they should be paid a bonus. It seems perverse and wrong to charge buyers a tax for purchase although the lenders do very nicely from this thank you. Surely it would make more sense to charge the seller stamp duty. They have almost certainly made a tax free profit on their sale. Knowing this government they?ll probably charge stamp duty on both buyer and seller.

As for the agents, shouldn?t they get more money for being able to sell in this market? I might be slightly biased but it would seem they deserve more rather than less.

[dazed&confused]

I think the stamp duty thing is a red herring. It's affordability that's the real problem.

I'm a potential first time buyer but there's no way I'm buying for at least another two years. I think we're in for a housing crash of epic proportions, meanwhile I'm going sit tight, keep on renting and build a bigger deposit. I always thought it would end in tears which is why I didn?t buy when everyone was telling me that prices could only ever go up.

You only had to look at the amount borrowing (public and private) and the massive growth in money supply to see the whole thing was unsustainable. But if you mentioned a housing crash a couple of years ago people would laugh in your face and say "It's different this time".

[AcedOut]

"If you can afford an extra house, you can afford the tax." - lol. And those people are probably already paying a lot more income tax to boot! Why should they be hit further if the wish to have a second home?

[SeanMacGabhann]

Because it's greedy?

Because housing is a limited resource and yet is something we consider an essential human requirement?

Because it distorts the market and leaves millions with no opportunity to own a home and yet ensures rents rise?

[Brendan]

"Why should they be hit further if the wish to have a second home?"

If someone is intelligent enough to make enough money to have 2 houses surely they are smart enough to figure this particular conundrum out.

[DaveR]

"Because it's greedy?"

Really? You have a good job or a successful company, and decide that rather than blowing your cash on champagne and cocaine you want to buy a nice place in the country where you and the kids can go at the weekends, or alternatively that rather than stick your cash in the bank (so they can lend it to property developers) you'll dabble in the landlord business yourself? What do you suggest SMG, give it all away? Maybe we're all greedy. Since when has that been a basis for taxation, anyway.

Because housing is a limited resource and yet is something we consider an essential human requirement?

Like food, or clothes, which we are happy to leave to the market to provide efficiently. Unless you're talking about specific types of housing in particular geographical areas, in which case slightly more specific and targeted measures may be more effective.

Because it distorts the market and leaves millions with no opportunity to own a home and yet ensures rents rise?

How is the market distorted when a person buys a house at the price a vendor is willing to sell for, regardless of whether they intend to live in it or rent it out? The reason rents in London have been broadly rising is because, despite increasing supply, demand has been even higher. Why? Because people want to live here, because there are jobs here etc. Arguably rents would be even higher if the rise of the samll landlord had not driven more semi-speculative development. And anyway, the opportunity to own a home is a two way street - the value of your investment can fall as well as rise!

[louisiana]

Because what they are doing is socially and environmentally detrimental to communities and to the entire British countryside. Buying up land you don't need (which drives up prices) and then expecting to preserve it in aspic just is not a sustainable model.

This month the good people (those that still live there) of Hinton St George in Somerset were demonstrating in London against the closure of their post office.

http://news.bbc.co.uk/1/hi/england/somerset/7507503.stm

It's one of the few amenities they have left, along with the village shop of which it forms a part. The reason why these small PO's and shops can no longer survive is that large segments of places like Hinton St George have been bought up by people who don't live there and rarely visit. They don't use the buses, they rarely use the shops that are left etc. etc.

It's strange walking around the place - as we did last year - and finding not a soul around, apart from the postmaster-cum-shopkeeper. A ghost village. It has been described elsewhere as having 'a fragile economy'. No doubt the second-home owners were protesting too - but it is their very actions that bring on this kind of local calamity. I'm hoping the shop will survive the lost of the PO income, but...

Just how many 'homes' do you 'need', personally, AcedOut? Three? Four? Ten? Twenty? There seem to be quite a few people around who think nothing of owig four or five houses that lie empty for months at a stretch or years. They can clearly afford it. Whether they need them in any sense is another matter.

If you wish to own a second, third, fourth etc. property (and no, it's not a 'home') as part of building your property empire, you will be paying some consequences sooner or later. (There will be less of a community left and few services. It'll just be a property. And howling to your 'second/third/fourth MP' about loss of local services probably won't have much effect.) It's just that others (people who need actual homes) are also paying for your greed. So why not tax your greed? Seems fair to me.

[SeanMacGabhann]

DaveR - Gordon Gecko was the BAD guy in that film, right?

[Brendan]

DaveR Wrote:

-------------------------------------------------------

> The reason rents in London

> have been broadly rising is because, despite

> increasing supply, demand has been even higher.

> Why? Because people want to live here, because

> there are jobs here etc.

Demand has been going up because the properties that should be being sold to first time buyers are being bought by people as buy-to-let investments, thereby forcing younger people to rent.

It?s not rocket science. This is exactly why many other countries regulate the buy-to-let market.

[macroban]

The buy-to-let investors should survive this recession.

It's the borrow-to-let amateurs who have problems.

Trouble is folk misunderstood the difference between "buy" and "borrow".

I suspect borrow-to-let was prevalent in boom-time East Dulwich.

[DaveR]

"Demand has been going up because the properties that should be being sold to first time buyers are being bought by people as buy-to-let investments, thereby forcing younger people to rent.

It?s not rocket science. This is exactly why many other countries regulate the buy-to-let market."

With respect, this is not rocket science, it's bollocks. The ability of people to fund buy-to-let is determined by market rents, not the other way round. If more properties were bought for occupation rather than for letting the pool of rental properties would fall and rents would stay high for those still renting. Borrowers or lenders involved in unwise buy-to-let ventures will take the hit, but owning residential property in London will continue to be good business in the long term, probably forever.

[Brendan]

Properties bought for letting become ?occupied? by the very people who can?t afford a first home because there are too few homes available due to other people owning more than one.

But if you want to insist on 1 + 1 not being equal to 2 go ahead.

[DaveR]

Brendan, there's a difference between too few homes being available (generally) and too few homes being available in East Dulwich, for example. If people are willing to pay a lot to rent in ED then buy-to-let investment is attractive and will drive prices up until the yield falls to a minimum realistic level. If people decide that they'd rather pay less rent and live in Penge, or that they'll buy their own place in Dartford, demand will fall, and so will rents.

If you want to insist on the basic principles of economics being mistaken, go ahead.

[macroban]

DaveR,

You might find it helpful to do a current East Dulwich void count.

MacRoban

[AcedOut]

So are we saying we should only ever buy things we NEED!? How ridiculous is that! All the bars and restaurants down Lordship Lane will have to close up and we'll fall into a recession for sure. Ok, so buying a second home/house is not analogous to eating out, but the principle is the same. If someone has worked hard and they can afford it, then why not!? It's not about need, it's about life-style choices and potentially investing for the future of either one's self or family. Sure, there are possible eco-reasons to not leave a property unoccupied, but I have no issue with someone owning n number of houses if that's what they want to do.

And who said we all have a right to own our homes anyway? A first time buyer still doesn't own their home until the mortgage is paid in full anyway, so is there really such a big difference between paying an interest only mortgage and renting!? If there was no property price inflation, then we'd all rent wouldn't we!?

I'll try to remember only to live to survive from now on. I shan't bother working hard, since luxuries are no longer allowed! Holiday cancelled!

[AcedOut]

The concept of a greed tax I'm finding hilarious. How about taxing people on food? I know, let's create a ration system and limit everyone to one loaf of bread and a pint of milk per week. Any further supplies can be taxed at a higher rate. That should work.

Greed tax could extend to holidays, alcohol, eating out,... Brilliant!

[SeanMacGabhann]

Thats not the point at all acedout and i think you know it

If you buy an extra beer or even a car you arent directly preventing anyone else from doing the same.

With a house. . . And especially if its one of the holiday homes in corn wall say. . . Where wages are tiny. . You are fairly obviously taking an unfair slice of the pie. You can still do it but why would you?

[Brendan]

DaveR you are of course correct but that wasn't my argument. I was questioning the wisdom of allowing property to be used as a commodity in such a way in Britain at the moment considering the housing shortage.

Acedout you are missing the point entirely.

[macroban]

The matter of food taxation is a little more complicated, AcedOut.

[Jimbob]

nothing wrong with having 2 houses provided they are used. we have the family home in east dulwich and in 1999 we bought a seaside residence in whitstable, where we spend every weekend,bank holiday etc. it is also used by friends and family on a very regular basis. called me greedy, call it unfair, but myself and the wife work pretty hard to be able to have the lifestyle and thats the choice we made to run the 2 houses. there was certainly no shortage of housing in whitstable when we bought and prices in 99 were certainly affordable, so do i now fell guilty that things have changed in the meantime, no i dont.

[louisiana]

DaveR Wrote:

-------------------------------------------------------

> "Because it's greedy?"

>

> Really? You have a good job or a successful

> company, and decide that rather than blowing your

> cash on champagne and cocaine you want to buy a

> nice place in the country where you and the kids

> can go at the weekends, or alternatively that

> rather than stick your cash in the bank (so they

> can lend it to property developers) you'll dabble

> in the landlord business yourself? What do you

> suggest SMG, give it all away? Maybe we're all

> greedy. Since when has that been a basis for

> taxation, anyway.

>

> Because housing is a limited resource and yet is

> something we consider an essential human

> requirement?

>

> Like food, or clothes, which we are happy to leave

> to the market to provide efficiently. Unless

> you're talking about specific types of housing in

> particular geographical areas, in which case

> slightly more specific and targeted measures may

> be more effective.

>

> Because it distorts the market and leaves millions

> with no opportunity to own a home and yet ensures

> rents rise?

>

> How is the market distorted when a person buys a

> house at the price a vendor is willing to sell

> for, regardless of whether they intend to live in

> it or rent it out?

DaveR, I suggest you go and read through a pile of planning legislation and regulation, kicking off with the Town & Country Planning Act 1947.

This Act introduced the idea of planning permission, which has been a feature of the UK landscape ever since. Planning permission is, even by a cursory assessment, a great distorter of the UK market (in the US it's much easier to build what you want, where you want, but they have a lot of space and we don't.).

On the one hand, it has given us many lovely green landscapes. On the other, it stops anybody from building anything much at all (even people who depend on the land for their livelihood) across most of that rural landscape. In some respects this is no bad things: the Barratts of this world are also hooked by it, largely (though not always; major developers are able to apply pressure for years to councils, who then give in). The rich just get around it by buying whatever little there is at whatever the price being demanded, regardless of that price. If someone asks 300k or more for an old 2-up, 2-down terraced agricultural cottage, many city workers can pay that kind of price but local workers (including agricultural workers) cannot.

In essence, UK planning laws have to a degree protected our countryside but at the expense of allowing affordable housing in rural areas. I would call that a distortion of the market. If I stopped all chair manufacture, I don't think you'd claim there was a free market in chairs, or that the market was not distorted.

The reason rents in London

> have been broadly rising is because, despite

> increasing supply, demand has been even higher.

> Why? Because people want to live here, because

> there are jobs here etc.

And everyone comes to the city from the country as they can't afford to live in the sticks (where the contrast between wages and house prices is generally greater and there are few if any bedsits, hostels etc.). Quite.