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Originally Posted by Ramrod
Not sure what point is being made in the post about central London properties being out of the reach of normal buyers. Those properties attract a lot of stamp duty, the building industry gets paid a lot to build them, developers make a mint and pay tax on that and then can reinvest their profits in building other developments......money goes round and at each stage tax gets paid to the government....which is what you surely want  |
No, I want the government to stop meddling in the housing market with their ridiculous schemes, liberalise it, and tax it properly.
What you've described exactly proves my point - the money goes in a circle, it's not being distributed to the wider economy. The taxation is crumbs off the table, units aren't sold in especially large quantities, especially second-hand, and the lack of ongoing property taxes besides council tax make it a cheap, safe asset to hold.
I want a low tax economy where possible, where people aren't spending huge swathes of the income on rents and mortgages in order that the government receives some stamp duty.
If it were as simple as you suggest Singapore and Hong Kong must've been committing economic suicide when they tried to dampen foreign demand for their property.
These must also all be completely wrong, and should be welcoming higher housing costs helped by foreign demand. They all advocate increased supply, however given their complaints focus around an average house price of £500k in London it seems fair to presume that million-pound flats aren't what they have in mind in terms of supply.
http://www.ft.com/cms/s/0/9dac9292-c...#axzz3fyAOOv5a
http://www.turnerandtownsend.com/moving-out/_23206.html
http://www.londonchamber.co.uk/lcc_p...e.asp?aid=4842
http://www.cityam.com/1411671893/why...n-s-businesses
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When polled, a majority of employees said they find it difficult to pay rent or mortgage costs and work in London. Of particular concern is the group of employees aged 25 to 39, with 70 per cent reporting that they struggle with the cost of their rent or mortgage.
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Seems reasonable to think that a combination of demand-side and supply-side reforms would be the best option. The obvious demand-side solution is further taxation / restriction on foreign ownership given supply seems to remain a major problem.
Developers don't want to develop too quickly, they are focused on maximum price per unit. UK housing has never responded well to increased demand, and there's zero reason to think this will change. The only time we've actually built enough is when the government step in to build. The Town and Country Planning Act ensures that supply is going to be difficult for the foreseeable.