Thursday, 20 March 2014

Yes, but it's my hard unearned money, bleat, wail...

From The Evening Standard:

Londoners are likely to bear the brunt of the bill as the Treasury rakes in a staggering £37 billion more in stamp duty and inheritance tax over the next five years, it emerged today.

OK, let's assume London landowners pay two-thirds of that, that's about £5 billion a year.

According to this article from February 2013: The total value of London homes currently sits at £1.12 trillion, which is bordering on 25% of the entire UK property worth.

London house prices have been rising by rather more than ten per cent a year compound for the last twenty years, and the usual suspects are gleefully forecasting that London house prices will continue to rise at this rate, that's £100 billion of wealth being transferred to London landowners each and every year for doing precisely nothing, £5 billion is five per cent of that.

Beats working.

Or to put that in perspective, one single London estate agency managed to collect nearly £1 billion in sales commissions last year. I'm all for bashing the UK government, but is it not fair to say that the UK has spent (i.e. taxpayers' money) rather more on London and people in it that the estate agents? Render unto Caesar and all that.

2 comments:

Bayard said...

I saw an ad for a house identical to the one in Battersea that I sold back in 1998 or 1999, which was on the market for four times what I sold mine for. As you say, it beats working. I certainly haven't earned that amount in the meantime, probably about half.

The Stigler said...

Indeed.

One of the things that people get confused about is the real benefit of things like building the Dome, Olympic Park, redoing the opera houses etc. It's not that Londoners gain from what those things provide, but in the work created - a Keynesian effect.