Is London really full of normal working people living in million pound houses?

[Morosky]

Because Heseltine seems to think there is, he just said so on Question Time.

Who is out of touch me or him?

About 28% of the popn in London live in Council Houses. I imagine another 5% of the popn are in another sort of subsidised housing (students on courses, Asylum grantees, MPs, key workers, etc.)

Morning Paper I really hope that if you lose someone close to you no one refers to them as just a DEAD person. Sheesh.

Ah I don't mean to offend by my use of language. I do think it's far, far better to tax the dead than the living.

My dead grandmother out-lived three husbands and then spent everything on cruises and red silk underwear... A far better example to the family than leaving paintings.

All I have left are hundreds of photos of a little sniggering old lady on various YACHTS and drinking champagne in jacuzzis.

I agree MP: I find the sense of entitlement to inherited money distasteful.

If everyone knew it was going to the taxman, they'd spend more during their lifetimes, thereby boosting the economy. (Runs for cover.)

MP - I would kill for a photo of my mother doing just that, and she was planning to which would have been aok with me. But she didn't expect to die before she retired. And tbh, if you think that dead people, or more specifically dead parents, do not still exert influence over their children's lives and that we still care about what they might think or feel or want, even though they are DEAD, then I'm afraid you are wrong. Perhaps some people are able to make a political statement with the money their family worked hard to earn, but I am just not that enlightened. Sorry.

I would hope my parents spend everything and have a wonderful retirement. Due to ill health that might not be the case so should they be penalised?

Should the be penalised for saving rather than spending?

I have no sense of entitlement at all but I do think what your family has worked hard for all their life should not all be re-distributed if they happen to be unlucky and die young. Funny sort of justice.

And supposing they did spend it all and then had to rely on the state for support, that does not seem right either does it?

Many older people now also lived through the war. They do save for a rainy day and are cautious about spending because they have lived through such testing times.

I think that is a much better attitude to money than spend everything you have (or indeed what you don't have) every month and bugger the future because someone else will pick up the tab.

My nan and grandad lived in Chelsea, in a council property in a very exclusive area. It was a three (double) bedroom, downstairs bathroom, no garden (just a concrete yard) terraced victorian house. They lived there for sixty years.
Sadly, they are both dead now, and the house sold last year for over a million.
They didn't have a pot to piss in, but lived in a very expensive house!

In answer to the OP I would say there are probably more than you think. £1 million round our way doesn't actually get you that much - lots of semis and even terraces fetch that and I don't live anywhere near Harrods. There are lots of quite ordinary people who bought 20 years ago sitting on a fortune (or rather living in it).

twirly - that is just like MIL. She grew up in a large victorian house in Chelsea. It was not a council house but the family were not at all wealthy, and it was not sold for very much, a long time ago, certainly she did not profit from it. We took her back to visit it a couple of years ago and it was enormous, and although we do not know what the price of that place was, the house next door was on for £1.8 million. Her face fell to the floor and she cursed her family for selling up and moving on!

SW London as well, and in my area a detached 4/5 bedroom house with anything more than a postage stamp of garden would set you back well over £1 million. 4 bedrooms in a terrace would be around £700-£800K.

(This is why we are staying put in 3 bedroom flat with no garden whatsoever...)

I think a £1m house is still a pretty unusual thing. And even in central London, someone who is in a house worth that much, even if they've been there for years, is still going to have a pretty substantial house with considerable running costs. So I don't really buy the 'asset rich/cash poor' argument - I think the tax is unlikely to significantly increase their outgoings, esp as I understand it is only 1% of the value OVER the £1m.

My objection is that it is arbitrary and retrospective: people shouldn't be forced to account for and/or be taxed simply to remain in their existing family home. How will the taxman value a property so precisely? In my previously booming area, the houses at £1mplus are sitting on the market for months, so are arguably worth very little to their owners!

The council tax is already linked to value (in a much broader way - valuing within a band rather than a precise amount upon which a tax is levied) and that is a factor for many people when downsizing, and this seems like an extension of that principle.

Seems a bit unworkable as well as immoral. Our house was nearly worth 1m a couple of years ago. Of absolutely no use to us, as we couldn't move, couldn't leave the city, couldn't change schools, certainly no use to us unless we used it as credit. But being savers, we didn't.

Anyway now it's worth less than that, obv. So would we stop being taxed ? Or just be taxed for the three or four months it sat up there ? Stupid idea.

High inheritance tax seems to penalise savers and encourage spendthriftiness. I suppose all the money available for spending ought to be pumped into the economy right now. But being brought up "careful" because you never know when a rainy day might come, I think that stays with you. I'd like to share that money between our rellies, because I already paid tax on it, and then paid tax on the interest too. And because it's our bloody money. We scrimped and saved and went without and are still doing it -- people might think it's boring but I really don't want it being spent on people who didn't bother thinking of the future and now find themselves stuck.

I think OBM and others are right; there aren't that many people in London in £1 million pound houses. My dad lives in a biggish four-bedroomed semi near Richmond - ie very sought-after Zone 3/4 border area -
ands his is worth nowhere near £1 million.

The people who are in £1 million houses might not be cash rich, but they are (axiomatically) asset-rich.

Maybe a better way to tap in to this asset value would be to radically increase stamp duty on more expensive properties?

People who really believe in progressive taxation advocate land taxes, I believe - possibly more workable than property taxes.

Oh, I was shouting at the telly at this one. MH was claiming that lots of "ordinary" terraces were over £1M. I was impressed with the Lib Dem guy's handling of him

The thing is, up until 18 months ago, a lot more ordinary houses were worth around the million mark.

The fact that they're not any more is a pretty significant issue with the suggestion.

Land registry figures released last month: average price in London is £306,963 (almost twice the national average). Average price in Kensington and Chelsea - the most expensive borough by a long way - is £712,190. Of house sales completed in May 2009, there were just 153 between £1m and £1,500,000 in the entire country; 69 of those were in London. The most common price range by far in London is £200k-£250k (1,053 of these in London in May).

We lived in a neighbourhood with many old houses/mansions of 5-6 bedrooms, fetching from 1.5 to 2.5 millions before the property crash. In fact 50 % of the neighbourhood (at least sizewise) were houses like that. These houses had been passed down from generation to generation, and many "normal" people lived in them. I remember one of them were for sale some 10 years ago, fetching 640k, and it was for sale again 2 years ago fetching 1.8 million.

I don't think 5-6 bedrooms constitutes an "ordinary terraced house" as MH was claiming

Have the Lib Dems set out how this tax would be evaluated? It seems unworkable to me. And retrospective taxation seems very unfair. Why go for this model over a steep hike in stamp duty at the £1m mark? What are the advantages?

Not sure of the details but it'd be payable as a percentage of value over the £1m.

£10k

£310k

Some examples of what can be got for the 'average' price in London.

I think the notion of 'average in London is probably uninformative. Many smallone-beds which are v cheap, many MUCH more expensive.

The problem, from a revenue raising point of view, with stamp duty is that is is a one-off (so you may only get stamp duty out if a particular property once every 30 years) and it generally has a chilling effect on property transactions: hence the current stamp duty holiday.

But as a one-off, if you really are going to tax the owners of high-value property, that is surely a better option: administratively cheaper, too, as the property is assigned a market value.

I can just imagine the army of valuers scurrying around, arguing over the valuation of large houses - is it worth £1.3 mill? Or £1.1m? You know, the windows do need replacing, the house next door has a much larger pool etc... It is a ludicrous idea.