House prices

[Socialmediamakespeopleunhealthilycompetitive]

In the mid 80s there were 3 bedroom family houses in ok areas of outer London for £50k, around 2.8 times a decent officeworkers salary. The same houses are now around £450k & ten times the same workers 2024 salary. I realise interest rates, even after recently hikes are somewhat lower. Since the late 90s I have wondered when people will demand government action on this, amd actually see lower housing costs as a good thing. When the above house was £200k ca. 2003, and 6 times a decent salary, I thought action might happen. Is the point at which action is taken the point at which the transactional costs of middle class young or middle-aged people buying their own home even wirh an inheritance become prohibitive? Do people doing jobs they don't like or which damage their health to pay enormous mortgages in expensive locations, London, Oxford, Cambridge, Dublin etc ever think about the opportunity cost of sitting on equity which could be invested to earn income if they relocated to a cheaper area? How on earth have modest, poorly insulated houses including those in rough areas been allowed to get to this astronomical level? Why is it politically unacceptable for a party leader to say they want to engineer lower house prices, perhaps even say 75 orn80£ lower (still leaves the million pound househat 200k)?

Of course, but I’d wager that buying a flat is not ego driven

But surely poll tax would encourage people NOT to downsize? Since they'd be paying the same on a 1 bed to a 6 bed? Unless I'm missing something here...

This is exactly the answer, spoken by someone who really understands the issues.

Unfortunately it will never happen as wealthy pensioners feel they have the right to rattle around in massive houses paying minimal tax for the rest of their lives, and so won’t vote for it. C’mon Rachel Reeves, do you care about the younger voters? This is what you need to do, get on with it!

(spoken as someone who would get HAMMERED by these sorts of tax reforms but cares about my kid’s future).

Of course, but I’d wager that buying a flat is not ego driven

I don’t know anyone who buys a house based on ego, thankfully!

House prices in this country are ridiculous. The only reason I was able to buy was because I was born in the 1970’s. It absolutely enrages me that people think it’s ok as you can get a 40 year mortgage etc. I’d make a hefty profit if I sold mine now. I don’t deserve it. I haven’t worked for it. I feel really sorry for young people now trying to get their own home.

You’d pay poll tax and land value tax. It’s the land value tax that’s expensive.

And no stamp duty gets rid of the major cost of moving, and encourages people to move when their current house no longer meets their needs.

Maybe we need a cap on value now. A bit like council tax bands

No one can sell over a ceiling price

I notice things are sitting longer Near Me and flats especially unless they are in a fab location.

My house is prob worth a million or just Under we
Bought for 780 but have completely renovated it includes the garden.

I could Move and get a detached house in a new town for about 600 and live of the rest. Or give it to my kids

I'm saving for them. I'm
Simon got get them
A 30k deposit each

I'm lucky

However something does
Need to be
Done. For rents too.

@BallooningBumblebee

I like the idea of scrapping council tax and having a land tax but I'm not sure about poll tax. That happened before and it was horrendous.

I was 19 when the council tax was Introduced I aren't a pittance and suddenly my
Parents had a huge bill. Ok it was my
Bill but I didn't have the money to pay it.
If it was done there need to be a low earner band and want about newly qualified students
Now that have loans to repay?? Add poll tax to them
Too.

I think a land tax that doesn't matter how
Many live there is better

Or just
Up income tax. That's the fairest way and scrap all other stupid taxes

But upping income tax wouldn't solve the empty nesters in huge houses issue.
I don't think you need land/poll tax - just reevaluate the CT bands and make them steeper at the very high end.

Why land tax though? My house sits on just under an acre of woodland so I can’t build on it and it provides environmental (wildlife, carbon sequestration, drainage, sound reduction) benefits to the local area. Oh, and I have to pay for maintenance and management of the trees.

Land Value Tax doesn't work in the way you seem to think it works. It specifically ignores the value of the buildings in the land or improvements you have made. Someone with a ramshackle old small bungalow on a large plot would pay the same as someone with a huge executive home. The value of the two houses would be vastly different but they would pay the same LVT.

You seem to think it can somehow be associated with the value of the property which would mean that it actually isn't LVT anymore and would remove many of the benefits of LVT which are around encouraging development.

In an area in the southern part of Croydon borough a modest property with a need of some updating did indeed sell.for £35k in 1983 or 84, I'm not.100% sure of the completion date but it was 1 of these years

I’m sorry, I meant a land tax, the likes of which exists in many European countries where you pay a %rage if the value of your house every year instead of council tax.

Or just Up income tax. That's the fairest way and scrap all other stupid taxes

No upping income tax doesn’t solve housing inequality.

I don’t see why we can’t have a LVT like France?

Prices are driven up by market forces.
The only thing that would put a lid on it would be if draconian restrictions on overseas buyers, owning more than one property and being anything other than an owner-occupier were introduced (with strictly limited licences for lettable properties to balance with local demand but with high enough costs for landlords that owner-occupier buyers can outbid property investors rather than the other way around)

You can't just reduce house prices by decree, but if you make it so that it's untenable for a landlord to keep a property e.g because they own 10 BTL properties but can only obtain licences for 6 - then a lot more properties go onto the market and so prices reduce organically.

Single parent households by definition are not single occupancy.

No. I think that you are missing the combined effect. Yes, they would pay the same poll tax on the 1-bed but they would be paying far less LVT given the lower value of the one bed.

I haven't stipulated how much of the overall tax would come from the poll tax and how much would come from the LVT. In truth, there's no point trying to work that out until the principle Is agreed. But, it could be something like £50 pm per adult for the poll tax and the rest made up by LVT.

I hate comments like this. It dehumanises the pensioners who have just as might right to live in their home as anyone else. They live near friends, family and support networks and may have lived in the same home for fifty years or more. What right do you have to take all that away from someone because it’s essentially in your best interests and not theirs?

The thing is though - as a society we do need to start incentivising people to live in houses that are the right size for them. Nobody should be FORCED to downsize but it should be encouraged and considered the norm.

It's a great point, but THAT poll tax took no account (as far as I remember) of house worth. In my model the poll tax would be a much smaller amount or proportion of the overall bill. It just feels fair that every adult enjoying council services should pay the same amount (ignoring the question of reliefs for specific cases).

Well I did say ignore farms, forestry, etc for now. We're talking about the general principle. I would expect different classes of land to attract different rates.

LVT will work in the way in which a government chooses to implement it. In my view, two equivalent parcels of land - one with a mansion and one with a ramshackle bungalow - would pay different amounts: their overall values being different. You are taking the expression LVT too literally. It can be set up in the most equitable and logical way possible.

Prices will drop when people stop buying