The fall of the Tory party

Although that 200k increase looks good on paper, often in reality it means that the property you want to buy has increased by £300k.

I can see your logic but the hope would be that CGT in primary homes would attenuate property price rises.

But that's just assuming you should just be able to buy another more expensive property based solely on the fact your property has increased in value, rather than the fact you've earned more money elsewhere or are able to get a bigger mortgage

This is exactly what we need to get away from. It's not sustainable to have a property industry based around expecting price rises to be able to afford the home you need for your family. It's bullshit and pretty much something people feel entitled to now days.

This doesn’t make sense though. If property prices all go up, it doesn’t make it easier to buy a new property because the next step up is more expensive as well. It only benefits (1) mortgage availability, as you have more equity - that’s helpful but doesn’t help with prices going up; or (2) people who are trading down so the gains cover the new place.

I agree we need to attenuate price rises and have argued for CGT on houses myself, so not saying its an awful idea - but i think there are real issues which would need to be fixed, and it is hard to see if it really ends up in that different a place to where we are now given SDLT does a similar role economically.

This doesn’t make sense though. If property prices all go up, it doesn’t make it easier to buy a new property because the next step up is more expensive as well. It only benefits (1) mortgage availability, as you have more equity - that’s helpful but doesn’t help with prices going up; or (2) people who are trading down so the gains cover the new place.

I suppose what I'm getting at is that we should stop treating property as investments whatever the reason for doign so..whether that be needing the property market to go up 30% so that you can afford to sell your flat and buy a house to have a family in or because you're a property speculator. It is not sustainable.

I would like to see people investigating:

• Banning ownership of UK property by overseas companies. Requiring a UK company to be set up for purposes of international ownership and payment of taxes.
  
• Strict rent controls.
  
• Secure long fixed term tenancy agreements.
  
• No S20 evictions.
  
• Court regulated process for increasing rents (as seen in other EU nations)
  
• Banning mortgages for second homes and new BTL mortgages.
  
• Charging CGT on primary residences.
  
  

Honestly I don't care that it doesn't get easier to buy property if prices have gone up. Houses should be homes, not investments. We need a housing market that people gives people the home they need for their family and security once they are in it.

Full disclosure: I used to be a landlord. I hated it.

If property prices all go up, it doesn’t make it easier to buy a new property because the next step up is more expensive as well

It does if your affordability constraint was LTV not mortgage x income multiple. At 95% LTV, a 10% rise in property prices increases your deposit 3x. This is how the "property ladder" really got going in the 80s. It also requires real wage growth and an increase in mortgage lending multiples versus incomes... not something we are experiencing today.

It also requires real wage growth and an increase in mortgage lending multiples versus incomes... not something we are experiencing today.

I hate to say it, but this is what makes me so gloomy about the UK. We've had politicians entirely focussed on their own careers and future elections for so long, national policy has basically been reduced to vote winning cock waving.

Its not just the property market that is broken as you say. Its wages, healthcare, taxation, childcare, eldercare, infrastructure, utilities, the environment. Everything is fucked. And the political climate doesn't allow long term solutions.

I would like to see people investigating:

Banning ownership of UK property by overseas companies. Requiring a UK company to be set up for purposes of international ownership and payment of taxes.
Strict rent controls.
Secure long fixed term tenancy agreements.
No S20 evictions.
Court regulated process for increasing rents (as seen in other EU nations)
Banning mortgages for second homes and new BTL mortgages.
Charging CGT on primary residences.

Send this to Starma
For their manefesto

Wait you want to tax me more for moving home?

Got their manefesto

I'd rather raise a people's army to seize the means of production and control of the state, but your suggestion works too.

Wait you want to tax me more for moving home?

Only if you sell your home for more than you paid for it.

What about my parents downsizing to release a large house to the market for someone that needs it and also to have a reasonable retirement where one party was a full time mother for 30 years and essentially only has a state pension?

I doubt there are many people who won't have made something on a house sale.

Edit: personally I'm for closing loop holes before new taxes.

We need a housing market that people gives people the home they need for their family and security once they are in it.

On the flip side, we need people to be able to move flexibly both intra-nationally and internationally depending on their job / education / family circumstances. That necessitates the ability to buy and sell a house with minimal friction (tax or otherwise) and a pool of rental stock (whether publicly or privately owned) that churns quickly enough to absorb demand.

Then, to the extent that a pool of privately-owned rental stock is desirable, increasing the blended cost of capital for landlords (by banning mortgages) is going to make rents even less affordable than they are today, ceteris paribus. I think the second home thing can mostly be dealt with through a holiday let crackdown.

What about my parents downsizing to release a large house to the market for someone that needs it and also to have a reasonable retirement where one party was a full time mother for 30 years and essentially only has a state pension?

I'm imagining a system where your parents would not have needed to bank on their house going up multiples of inflation while they owned it in order to need to sell it to have a comfortable retirement.

Yes I can see that - i thought i acknowledged this in mortgage availability / equity? I would just be surprised if that covers that many people, however. At recent prices income multiples must be a problem for most people (or the stats on incomes are wrong)

Then, to the extent that a pool of privately-owned rental stock is desirable, increasing the blended cost of capital for landlords (by banning mortgages) is going to make rents even less affordable than they are today, ceteris paribus.

I disagree, the effect of banning mortgages for 2nd homes would be to significantly reduce the value of property because fewer people would be able to afford to buy a 500k house with a 50k deposit. Prices would adjust for that. More tenants would be able to buy a home. There would be fewer tenants paying landlord's mortgages.

I do largely agree with your point though. It requires huge investment in housing to make anything like this work.

Prices would adjust for that. More tenants would be able to buy a home.

There's always a tension in this argument. The strata of better-off tenants would have a better chance of buying their own place, I agree, but there is a less well-off bucket of tenants that would do worse.

Are those worse off tenants really that much worse off if they have secure long term tenancies with no no fault evictions , rent controls and minimal risk of unfair rent raises meaning that they can stay in their homes for decades and will always be paying affordable rent?

When I say affordable rents I mean rents that allow people to have savings and a financial safety blanket. As seen in various EU countries.

As opposed to the UK, where about 25% of adults have less than £100 of savings.

Only if you sell your home for more than you paid for it.

Does this include mortgage interest payments? Because at the risk of qualifying for the golf club, I've more than paid off the purchase price of my flat already and I still have around 40% of that price left to pay.

If you do all that you probably don't have to worry about BTL mortgages as no-one will be tempted to buy one. FWIW I don't think that's the end of the world, you just need to cash up housing associations to scoop up the stock that will be dumped on the market. Question is whether you allow housing associations / government to borrow money to buy property (joke).

Love how much shit @Stonehedge is getting for daring to suggest that if people make huge gains on an asset, they should be taxed on it. Also puts into scale a bit the problem, given that I suspect most of they people on a Tory-downfall thread are not, well... Tories, and how fucked up Brits attitudes are towards housing (i.e. not first and foremost a place to live).

What about my parents downsizing to release a large house to the market for someone that needs it and also to have a reasonable retirement where one party was a full time mother for 30 years and essentially only has a state pension?

What on earth were they planning on doing had they not had their house increase in value 400% over the last 30 years?

Re. the risk argument: Equal (or greater in recent years) risk in the stock market, but you pay capital gains?

Assume the state pension and my dad's would cover it. Unfortunately the infinite gifts of inflation and government mismanagement fucked that.

Also even without a 400% rise in prices I don't think it's unreasonable to expect the difference in value between a 4/5 bed family home and a 2 bed flat should be allowed to release capital for retirement.

I don’t think it’s a case of getting loads of shit - more about everyone discussing so it’s clear what it means. There’s loads of comments which imply that somehow prices rising mean people are able to have a bigger proportion of the overall housing stock, when what’s actually happening is that they have a bigger paper value but probably a bigger mortgage and the next size house up is even further out of reach.

You’re talking about making housing not primarily a financial investment. I agree, that should be the aim. But saying “tax it because you’ve made a profit” ignores the fact that might not be a usable profit if you need to spend it (and add more from your pocket too) on your next house

https://www.theguardian.com/commentisfree/2022/nov/04/suella-braverman-chinook-home-secretary-priti-patel?CMP=Share_iOSApp_Other

Not sure whether to laugh out to cry.

Love the idea for CGT on house price values.
Use the tax to build more social housing too.