Sunday, 28 July 2013

"It is mad, mad, mad, yet much of Britain's economic structure and culture are invested in the madness"

"The government will build no homes itself: it confines itself to measures such as build to rent or Help to Buy, where new homes are a hoped-for consequence of its guarantees and measures. But it will take no direct action. A useful stimulus, but I am told George Osborne only endorsed Help to Buy, with its Keynesian overtones, when he was assured it would help create rising house prices and a feelgood factor for Tory voters. Disappointing.

Almost every dial on housing policy is on the wrong setting. A government that wanted to break into a saner world would move on a number of fronts. It would devise mechanisms to wean the financial system off its addiction to residential property lending, probably setting overall limits to the growth of categories of credit, such as mortgages, and controlling mortgage loan-to-property price ratios. It would revalue properties to today's values and then introduce a graduated system of taxation".

Will does however suggest that it isn't really, as some suggest, bonanza time for Landlords ...

"But because house prices are so high, the buy-to-let company Paragon – speaking for most private landlords – complained, in evidence to the select committee on communities and local government, that the yield it gets is a mere 6%. Although these figures may be higher than the yields gained from investing in stocks and shares – so Paragon should complain less – they are hardly at profiteering levels. To end up in a situation with both close-to impossibly high rents for tenants and moderate returns to landlords takes some doing".

... before returning to 

"The taxation of property is stuck at 1991 values because no politician will entertain the political fallout of organising the council tax on proper, up-to-date valuations, let alone entertain introducing a rational system of property tax".

23 comments:

Mark Wadsworth said...

Things have come to a sorry pass when I start agreeing with WIll Hutton.

Or perhaps he has started agreeing with me?

Rich Tee said...

I am reminded why I decided to stop voting and take my name off the voter's roll.

You might say "you've disenfranchised yourself", but as no political party will do anything about this, I am disenfranchised already, I just won't play along with the game anymore.

Mark Wadsworth said...

RT, or you could get your self back on and stand as YPP candidate?

The Stigler said...

But the issue isn't "council housing". It's "housing". We have been underbuilding for decades, largely because the homies have put up so much resistance.

It doesn't need to build, it just needs to stop getting in the way of building and that means liberating the planning system.

It would also help if we stopped so many damn susidies to expensive areas like London and the South East (e.g. housing benefits, large gov projects, subsidised teachers and policemen).

Then again, both parties are now run by London-types, so without a change in the electoral system, that's unlikely to change.

Rich Tee said...

Mark, I have previously looked at the YPP manifesto but I don't like the name "Young People's Party". It is a bit restricting and gives off the wrong message.

DBC Reed said...

@TS
How are you going to liberate the planning system from dreaded state controls,( the perennial cry of right-wingers like Worstall ),and simultaneously deal with local objectors (also middle-class right-wingers)who stop any planning liberalisation in their backyards? The latter cling to the green belts with more fervour than the Statist Socialist, a figure so despised nowadays that I am drawn to don this mantle and be in the van of the next turn of the wheel of fashion.
What is needed is of course a swingeing Land Value Tax of any of the 57 different varieties though I favour one of the originals : the JS Mill version that does n't attempt to tax the present value but scalps it should it dare to inflate OR second choice the Mark Wadsworth cross subsidising combination of LVT and Citizens Income. Things are so bad now that the Return of JSM seems like a necessary emergency measure; the MW system, finely crafted as it is may just be too subtle for these very crude times.

DBC Reed said...

@RT
You and me both mate but it's Mark's train set.

Mark Wadsworth said...

TS, agreed. But from Will's point of view, if the government has money to spend and a lot of people are being priced out, it makes more sense to build council housing than to give it to banks and landowners. And with those narrow assumptions, he is correct.

RT, DBC, look, I've done this one to death with dozens of people.

The name "Young people's party" is somewhat trite, I admit. but all party names are nigh meaningless (compare and contrast - Scottish National Party with British National Party).

If you assume that somebody has little interest in politics, and that is most people, at least he would be able to guess 3/4 of YPP's policy aims just by seeing the name on a ballot paper.

And if that person knows about tax and economics, he would probably be able to guess 9/10 of the YPP manifesto, i.e. how we are going to achieve those 3/4 of policy aims which are blindingly obvious.

So far, nobody has ever come up with a name which achieves this simple goal of conveying as much information as possible in three words to the uninformed voter.

DBC Reed said...

@RT See what I mean?

Mark Wadsworth said...

DBC, I would be delighted if somebody could come up with a name (not more than six words) which immediately conveys most of our manifesto to the uninformed voter, and which sounds nice when it's abbreviated.

I'm not being stubborn, I'm being realistic.

So all suggestions on a postcard and mail them to the usual address.

The Stigler said...

DBC,

Right now, I don't have a plan. But we have a situation at breaking point between conflicting desires.

You can't keep taxing the people in the regions to pay £10+bn as a housing benefit subsidy to London (along with every other subsidy to London) and then not expect their kids to want to move to London because that's where the work is.

The greenbelt homies like London to be popular enough that it raises their house prices, but not so popular that more housing gets built to dilute that value. And that just isn't going to happen.

The Stigler said...

Actually, YPP may benefit from actually being a bit shit. I remember when the Wii came out that people thought it was a ridiculous name for a console, but if nothing else, it was memorable.

People get way too hung up on names and logos. It might matter for clothing and soft drinks, but in most areas, no-one cares.

Mark Wadsworth said...

TS, "a bit shit" is going a bit far, "tongue in cheek" might be more appropriate.

The Stigler said...

Mark,

I apologise. A bit clunky.

The important part is good principles and policies, and you've got those.

Mark Wadsworth said...

TS, no offence taken.

Unfortunately there is no catch-all word of phrase to describe "people - primarily between the ages of 18 and 40 or so - who are unwilling to vote for on of the existing establishment parties and who derive the bulk of their income from working - or are involuntarily unemployed - and who are adversely affected by high taxes on income and high rents and house prices and who are otherwise pretty liberal when it comes to free markets, drugs, gay marriage etc"

So "young people" will just have to do.

Lola said...

How about the 'Proper Property Party'?

Mark Wadsworth said...

L, I know what you mean but that'll attract entirely the wrong sort of voter.

Lola said...

MW Quite - they'll vote you (us?) in by accident....looks like a plan to me...

DBC Reed said...

Postcard from the Edge (of Midlands):
Young People's Party sounds too much like Lord Sutch's National Teenage Party to someone of my age, although this was totally successful in securing votes for eighteen year olds.
My suggestions (as invited!): CHANGE = Cheap Housing ANd Good Employment; or Gainful or Guaranteed Employment.
CHE = Cheap Housing Everywhere or Cheap Housing Enriches
CRAMLE= Cheap Rents And Mortgages Liberate Everybody or Economy.
RICH =Real Incomes Cheap Housing
HELPP= Housing Expenses Leave People Poor.
Some of these could n't take Party on the end but the description on the ballot paper is the only chance for a non-machine party to gets its message/slogan across. Also dropping the word Party
has a pleasant early 60's vibe when groups dispensed with the word The.
Also query "tongue in cheek" title: people don't understand what's in front of them, let alone irony!

DBC Reed said...

Over breakfast:
HHPCU High House Prices Cause Unemployment (après Andrew Oswald from way back and now again with Danny Blanchflower);
LAND Live Anywhere No Downside,
CHANGE could also mean Cheap Housing At No Great Expense.

James Higham said...

It would devise mechanisms to wean the financial system off its addiction to residential property lending

There's sense in that. The mechanism for the alternative is the thing.

DBC Reed said...

Last thought:
ABTLDP About To Lose Deposit Party

Mark Wadsworth said...

DBC, "CHANGE" was the best so far, keep going.

JH, it's not an addiction at all, that would imply something that they think is somehow harmful to their interests, it's like saying "Mao Tse Tung was addicted to killing people".