I have to tell you that you have missed the major obstacle, most of the rental properties are owned by ministers, counsellors and the elite, they do not want anyone to be able to afford to buy because they are raking it in. Taxes pay those who cannot afford rents, in the form of benefits, and those that can afford it need to keep paying, preventing any means of saving. In addition they are reluctant to keep rental housing in a liveable condition, rendering most private rented housing damp and expensive to heat
conall boyle
3 years ago
“publicly-owned ‘community land banks’ taking control “ But that’s Communism! How could such an idea get past the Daily Mail?
Good article, you’ve identified the real problem of high prices of LAND. There are other non-communistic ways of solving this problem. Site Value Rating anyone? But how are you going to sell falling house prices to today’s owner-occupier?
Jason Smith
3 years ago
This seems a hugely complicated solution to the problem, and also fraught with all the usual inefficiency and moral hazard that occurs when governments take over chunks of industry. Surely, the simplest answer is a land tax? Builders wouldn’t hang on to land banks if they had to pay significant tax on them and it would regulate house prices, especially in sought after areas.
Yes. The simple solutions are often the best. So why hasn’t it happened, and why is there no realistic option of it happening (in the UK, in the foreseeable future)? Because the vested interests of capital would never allow their employees – the ‘opinion formers’ and the mainstream media – to present the idea as a realistic and sensible option.
Steve J
3 years ago
The only sustainable way to solve the housing crisis is to stabilise the population at current levels. This means close to zero net immigration and adjusting the benefits system to discourage large families.
Sustainable is the key word. The size of the country isn’t increasing, so a continually growing population means competing for a reducing stock of land. Prices must always increase. This is aside from the continuing decrease in available farmland, and the increase in energy use and waste produced. We need to bring an abrupt halt to population growth and invest in the training and education of the people already here.
Rebecca Bartleet
3 years ago
A problem you don’t mention is the increase in single person households. Couples used to buy a house together when they got married, now everyone wants their own place.
Single people often lived in digs, there would be houses with several lodgers and the landlady all living together, or bigger houses divided up into bedsits. Now everyone wants their own place!
Virtually all house building at the moment is in the hands of the big 4 and they don’t build what people need, they build what is most profitable for themselves. Building more houses that are too big and that people can’t afford to buy is not going to solve the housing shortage.
Finally, as long as property sells it will be built and a fair bit of property is being built and sold as an investment, and is never lived in!
The free market will not deliver the homes people need and the government needs to intervene to ensure that all housing needs are being met and that brownfield land is used first.
ralph bell
3 years ago
There is a huge amount of people renting out one or more house they own due to high salaries or inheritance fortune. Their are also a lot of elderly blocking up family homes with longer life expectancy and not wishing to move whilst the property deteriorates. This reduces the available stock a lot. With future generations earning less and possibly with less work available I would suggest a big building programme of affordable council housing as either flats or small family homes. I whole-heartedly agree people need a secure home to have a stake in their community and society. It should be government priority for either party, definitley a vote winner from the young I would imagine.
The solution sounds very much like a rehash of Henry George’s proposal in “Progress and Poverty.” He argued that changes in the value of unimproved land were not the result of anything the owner did, and so the proceeds of any such changes should be appropriated for the common good. He proposed a very heavy tax on land, so that the price you paid for a plot was only the value of the improvements on it (the water/sewage/power pipes/wires, and then the building). Only drawback – the tax was an annual event, so, if the land became more valuable (because of a school or shopping centre being built nearby) then the occupier would have to pay more tax.
Aden Wellsmith
3 years ago
Problem is very simple. When Over 20% of your income is redistributed to pay the socialist pension debts, you accrue no wealth. You just get further and further into debt. Those debts are taken out in your name and the debt is hidden off the books.
When you bring in millions of low paid workers, those starting out don’t get the low paid jobs to get experience, They are forced on to the dole or on to low wages. Even the better off are impoverished because they are forced to subsidise the low paid migrants.
There is no easy solution, just pain
Tommaso DeTommasi
3 years ago
What the author is suggesting is effectively expropriation of land. How else would one ban the owner of farmland from selling at a price that includes the value that comes from the ability to build on that land? In an arm’s length transaction, the buyer and the seller would both see that value and would be willing to share it. I cannot see how “abolishing hope value” is supposed to be achieved. The author does not explain it.
According to Halligan ‘Home Truths’ (a must read) the original TCPA envisaged compulsory purchase at agricultural use-value. A 1961 overturned that and ‘hope-value’ was re-instated. One project which slipped through was Milton Keynes, where land was cheaply bought and vested in the Development Corp
A partial solution. Abolish the tax on moving, stamp duty. Abolish inheritance tax. Allow them to invest their NI for their old age and for a deposit on a house.
This is all summed up in Liam Halligan’s book Home Truths, which I found tedious and repetitive, but does give all the information that one needs to understand the problem
Fraser Bailey
3 years ago
All the many articles such as this fail to mention the huge amounts of property wealth that will pass down to the Millennials and Gen Z etc.
But at what point in the lives of these generations will that wealth transfer? It will hardly be a life defining experience for people to become home owners in their late 50s and 60s.
Having control over your own home and the sense of security and accomplishment that brings is good for the individual, for their families and for society as a whole.
But people are living longer than they used to… My parents are due to retire in the next few years, but I still have grandparents on both sides. How old will I, as a mid-millennial, be when I eventually inherit?
I have to tell you that you have missed the major obstacle, most of the rental properties are owned by ministers, counsellors and the elite, they do not want anyone to be able to afford to buy because they are raking it in. Taxes pay those who cannot afford rents, in the form of benefits, and those that can afford it need to keep paying, preventing any means of saving. In addition they are reluctant to keep rental housing in a liveable condition, rendering most private rented housing damp and expensive to heat
“publicly-owned ‘community land banks’ taking control “
But that’s Communism! How could such an idea get past the Daily Mail?
Good article, you’ve identified the real problem of high prices of LAND. There are other non-communistic ways of solving this problem. Site Value Rating anyone? But how are you going to sell falling house prices to today’s owner-occupier?
This seems a hugely complicated solution to the problem, and also fraught with all the usual inefficiency and moral hazard that occurs when governments take over chunks of industry. Surely, the simplest answer is a land tax? Builders wouldn’t hang on to land banks if they had to pay significant tax on them and it would regulate house prices, especially in sought after areas.
So what rate per acre given no other taxes?
Yes. The simple solutions are often the best. So why hasn’t it happened, and why is there no realistic option of it happening (in the UK, in the foreseeable future)? Because the vested interests of capital would never allow their employees – the ‘opinion formers’ and the mainstream media – to present the idea as a realistic and sensible option.
The only sustainable way to solve the housing crisis is to stabilise the population at current levels. This means close to zero net immigration and adjusting the benefits system to discourage large families.
Sustainable is the key word. The size of the country isn’t increasing, so a continually growing population means competing for a reducing stock of land. Prices must always increase. This is aside from the continuing decrease in available farmland, and the increase in energy use and waste produced. We need to bring an abrupt halt to population growth and invest in the training and education of the people already here.
A problem you don’t mention is the increase in single person households. Couples used to buy a house together when they got married, now everyone wants their own place.
Single people often lived in digs, there would be houses with several lodgers and the landlady all living together, or bigger houses divided up into bedsits. Now everyone wants their own place!
Virtually all house building at the moment is in the hands of the big 4 and they don’t build what people need, they build what is most profitable for themselves. Building more houses that are too big and that people can’t afford to buy is not going to solve the housing shortage.
Finally, as long as property sells it will be built and a fair bit of property is being built and sold as an investment, and is never lived in!
The free market will not deliver the homes people need and the government needs to intervene to ensure that all housing needs are being met and that brownfield land is used first.
There is a huge amount of people renting out one or more house they own due to high salaries or inheritance fortune. Their are also a lot of elderly blocking up family homes with longer life expectancy and not wishing to move whilst the property deteriorates. This reduces the available stock a lot.
With future generations earning less and possibly with less work available I would suggest a big building programme of affordable council housing as either flats or small family homes. I whole-heartedly agree people need a secure home to have a stake in their community and society. It should be government priority for either party, definitley a vote winner from the young I would imagine.
So get rid of stamp duty, a tax on moving.
The solution sounds very much like a rehash of Henry George’s proposal in “Progress and Poverty.” He argued that changes in the value of unimproved land were not the result of anything the owner did, and so the proceeds of any such changes should be appropriated for the common good. He proposed a very heavy tax on land, so that the price you paid for a plot was only the value of the improvements on it (the water/sewage/power pipes/wires, and then the building). Only drawback – the tax was an annual event, so, if the land became more valuable (because of a school or shopping centre being built nearby) then the occupier would have to pay more tax.
Problem is very simple. When Over 20% of your income is redistributed to pay the socialist pension debts, you accrue no wealth. You just get further and further into debt. Those debts are taken out in your name and the debt is hidden off the books.
When you bring in millions of low paid workers, those starting out don’t get the low paid jobs to get experience, They are forced on to the dole or on to low wages. Even the better off are impoverished because they are forced to subsidise the low paid migrants.
There is no easy solution, just pain
What the author is suggesting is effectively expropriation of land. How else would one ban the owner of farmland from selling at a price that includes the value that comes from the ability to build on that land? In an arm’s length transaction, the buyer and the seller would both see that value and would be willing to share it. I cannot see how “abolishing hope value” is supposed to be achieved. The author does not explain it.
According to Halligan ‘Home Truths’ (a must read) the original TCPA envisaged compulsory purchase at agricultural use-value. A 1961 overturned that and ‘hope-value’ was re-instated.
One project which slipped through was Milton Keynes, where land was cheaply bought and vested in the Development Corp
Expropriation worked in Singapore!
There’s lots of empty land in Scotland. It’s bog, plagued by midges, but build thousands of homes there.
How to rescue generation rent:-
1. Build more homes.
2. Control immigration.
A partial solution.
Abolish the tax on moving, stamp duty.
Abolish inheritance tax.
Allow them to invest their NI for their old age and for a deposit on a house.
Thanks, yes, those are important too.
This is all summed up in Liam Halligan’s book Home Truths, which I found tedious and repetitive, but does give all the information that one needs to understand the problem
All the many articles such as this fail to mention the huge amounts of property wealth that will pass down to the Millennials and Gen Z etc.
But at what point in the lives of these generations will that wealth transfer? It will hardly be a life defining experience for people to become home owners in their late 50s and 60s.
Having control over your own home and the sense of security and accomplishment that brings is good for the individual, for their families and for society as a whole.
But people are living longer than they used to… My parents are due to retire in the next few years, but I still have grandparents on both sides. How old will I, as a mid-millennial, be when I eventually inherit?
You could always do what your parents did.