The fall of the Tory party

Thanks, and I did read that a few years back, will re-read.

I guess, looking from a perspective of wanting higher housing security and less mortgage volatility in the UK, additional insurance and protection of deposits or other ways of reducing the possibility of bank runs could then assist a move toward longer term fixed mortgages.

Anyway, I’ll stop derailing the thread now. Thanks for your responses.

If we want lower house prices then the cost of lending has to increase, surely?

Yeah, absolutely. And probably smaller/stricter income multipliers too, as well as everything @Stonehedge said a little while back about BTL & rent control.

The other issue is that over 50% of homeowners don't have a mortgage at all. Ideally, that buying power needs to be rebalanced too, so first-time buyers can even get a look-in.

I'm also still seeing no downsides to 100% inheritance tax, apart from salty rich guys.

What about passing objects or heirlooms? It effectively means that only children with means can inherit anything. There's also a psychological aspect to want to leave something for your children.

I can't remember who it is, a French economist who proposed higher IHT preventing vast transfers of wealth and using that to give a universal "inheritance" of c.200k to everyone at 25yo. I won't butcher his arguments, but I found them very convincing.

I'm against anyone inheriting anything. All goes to the state to fund social housing and UBI.

The Tories are still cunts though, right?

Fair enough then.

I can't remember who it is, a French economist

Thomas Piketty, sounds like.

My grandmother was a potter so I have a number of soup bowls that she made. They are worth nothing. But if she had been Clarice Cliff or Barbara Hepworth they would be worth £££. Where is the line to be drawn?

Surprised that there is an appetite for rent controls here.. Generally a discredited idea (Krugman even regards them as so).

Re the Fannys... They ventured underwater in 2008 when the credit markets went AWOL.

My view is that the central banks are currently nakedly pretending to understand the current crisis. The inflation of the 70s wasn't a steady line; it happened as a succession of spike events. Likely that we'll see something similar now.

Chancellor..
https://themarket.ch/interview/edward-chancellor-central-banks-delayed-the-day-of-reckoning-ld.7051

Generally a discredited idea

Why? Works well in plenty of places.

Other than the landlord-centric concern of it reducing property prices, what's the catch?

Where? My understanding is that it leads to a shortage of rental property which blocks new tenants, and a disinclination to improve current property.

Krugman..
https://www.nytimes.com/2000/06/07/opinion/reckonings-a-rent-affair.html

Edit to add.. a gloss

https://www.governing.com/gov-institute/voices/col-rent-control-bad-idea-making-comeback.html

Austria and Switzerland are the two I'm most familiar with. Vienna is one of the most affordable cities in the world, in terms of rental costs.

Can see how supply could be reduced by it in terms of fewer developers thinking it's financially viable to build apartments, but that's a problem to be solved...not a reason to not do it.

As somebody mentioned upthread... it'd need to be accompanied by empowered housing associations and social housing projects. Clearly the current situation of developers building luxury flats with one or two"affordable units" couldn't continue.

https://www.google.com/amp/s/amp.theguardian.com/society/2017/dec/12/vienna-housing-policy-uk-rent-controls

The pinkos are clutching handbags about the tax breaks for landlords in Vienna.
https://www.tandfonline.com/doi/full/10.1080/02673037.2020.1806992

Which brings up the problem with rental property... Who finances the construction and management?

Sounds like the answer is to increase wages (probably while trying to arrest increasing house prices)?

It's not a simple problem allocating housing whether through private nor state investment.

The idea that anyone can control markets (labour or property) is absurd.

I think one of the avenues to go down here is to disallow BTL mortgages for existing properties, and only allow it on new ones.

Also happily creates an incentive for potential landlords to build or fund the building of new homes, but particularly where rentals are most needed: on brownfield plots in cities and densifying the suburbs, allowing things like cycling infrastructure to become more viable.

At the current rate of IHT it should only take a few generations for most of a fortune to be taxed.

It doesn't though because there are way too many ways to avoid it. Rather than bumping up the rate you'd get more by making it more difficult to avoid.

Again we enter the world of the govt interfering with capital allocation which generally has unintended consequences... I'm probably too righty for this thread.

The questions of money supply and capital allocation are probably the very things that will cause RS to lose the next election.

money multiplier

This is the bit that did me in during A level economics, I was comfortably cruising at the top of the class but this shit popped up with a big twirly diagram and I said "why?" And never felt like it was properly explained, it just kinda was and I still don't believe it. I did feel similarly about trigonometry and have since seen that there is a why, even if it was never really explained well at the time, so happy to be proven wrong.

Not necessarily. Market-driven capital allocation tends toward over-centralisation in natural monopolies, like land. Allowing private building for only new homes just uses that in a socially productive manner, without reducing the private capital of others.

(I’d argue that landlords are bad capitalists, much like Adam Smith.)

Basically a post-hoc rule of thumb to make sure banks are lending responsibly. It’s largely bullshit these days, but still grips common knowledge.

https://games.ramjam.co.uk/hancock/