Somebody at Shelter has trawled through the accounts of all the large
land bankers home builders and confirmed what we had already guesstimated.
From The Guardian:
The government wants to build 1m new homes in England by 2020. This would mean building 200,000 a year, but the existing construction levels of just over 150,000 are well behind that.
Despite the fact the nine listed housebuilders hold more than 600,000 housing plots, they sold just 66,881 homes between them in their last financial year.
The annual figure of 150,000 is not unduly low by historic standards, the average since 1945 is about 160,000 private sector completions. The years when annual completions were nearer 300,000 was because of council house building.
What is interesting is comparing what their PR people say to the media with what they say to shareholders in their annual reports:
Taylor Wimpey also pinpointed the “slow and complex” planning process and said all sides of the housing debate needed to be patient if more homes were to be built. A spokesman said… "Whilst it is improving, the planning process is slow and complex and a number of conditions need to be fulfilled before development can commence on our sites. A shortage of resources in planning departments also often means that delays occur in this process."
Ho hum. From their 2015 interim report (download from here):
Land bank - movements in period
Brought forward +75,136
Plots acquired +3,620
Strategic land conversions* +5,666
Land sales -297
Scope changes -655
Balance at end of period =77,372
Detailed planning +45,787
Outline planning +22,508
Resolution to grant +9,077
So in their accounts they boast that they have enough land with planning for about six years' construction.
* The land bank figures only include land with planning. It does not include 'strategic land' which they bought on spec; in this period they managed to obtain planning for 5,666 plots of 'strategic land' which is transferred to their official land bank.
To cut a long story short, TW have no interest in getting planning any faster, their profit maximising output level is whatever it is (taking all house builders together, they restrict their output to one tenth of total sales in any year) and there is no incentive to build more; in turn, there is no point in getting planning permission for land which they have no intention of using for the next seven or eight years.
Thursday, 31 December 2015
Somebody at Shelter has trawled through the accounts of all the large
Wednesday, 30 December 2015
Tuesday, 29 December 2015
AK Haart has posted his favourite, so here's mine.
From the BBC:
Mr Carswell said UKIP "needs to change gear and to change its management if it's to go the next level"…
In a reference to Mr Farage's claim that the Oldham by-election postal vote was rigged, he added: "I don't want to wake up the morning after the European referendum and hear it was the postal votes."
From The Daily Mash 13 November 2015:
MOTÖRHEAD frontman Lemmy has reassured fans that he is eternal and will never die.
Following the sad death of the band’s original drummer Phil ‘Philthy Animal’ Taylor, Lemmy has confirmed that he, like the music of Motorhead, will never change in any way…
From the BBC 29 December 2015:
Motorhead frontman Lemmy has died aged 70, two days after learning he had cancer, the British band has announced.
Lemmy formed the rock group in 1975 and recorded 22 albums, including Ace of Spades, as he became one of music's most recognisable voices and faces…
Monday, 28 December 2015
The results to last week's Fun Online Poll were as follows:
Sports Lack Of Personality Of The Year Award
Andy Murray - 40%
Tyson Fury - 16%
Lewis Hamilton - 10%
Mo Farah - 7%
Greg Rutherford - 6%
Lizzie Armitstead - 6%
Jessica Ennis-Hill - 5%
Chris Froome - 4%
Kevin Sinfield - 4%
Max Whitlock - 4%
Andy Murray ticked nearly all the boxes - not having any noticeable personality or having won or done anything notable this year. The only ones he failed on were we've all actually heard of him and know he plays tennis.
Runner-up Tyson Fury on the other hand, ticked none, having a cool name, taking part in an inherently controversial sport, having strong opinions, however repugnant, and actually having won something notable this year and then being promptly stripped of his title for some obscure reason.
Just goes to show.
I have no strong opinion on how to minimise flood damage and those who do take an interest have strongly diverging views:
In the green corner, George Monbiot:
Just as remarkable is the collective lack of interest in what happens when rain hits the ground. The government boasts that “we are spending £3.2 billion in flood management and defences over the course of this parliament – half a billion pounds more than in the previous parliament.” Yet almost all the money devoted to freshwater flood relief is being spent at the bottom of river catchments. This means waiting until the wall of water arrives before seeking to contain it; a perfect formula for disappointment.
A rational policy would aim to prevent the flood from gathering in the first place. It would address the problem, literally and metaphorically, upstream. A study in mid-Wales suggests that rainwater’s infiltration rate into the soil is 67 times higher under trees than under sheep pasture. Rain that percolates into the soil is released more slowly than rain that flashes over the surface. But Cumbria’s hills are almost entirely treeless, and taxpayers, through the subsidy regime, pay farmers to keep them that way.
Rivers that have been dredged and canalised to protect farmland rush the water instead into the nearest town. Engineering works of this kind were removed a few years ago from the River Liza in Ennerdale. It was allowed to braid, meander and accumulate logs and stones. When the last great storm hit Cumbria, in 2009, the Liza remained clear and fordable the following day, while other rivers roared into furious spate. The Liza’s obstructions held the water back, filtered it and released it slowly. Had all the rivers of Cumbria been rewilded in this way, there might have been no floods, then or now.
So trees and rewilding good; dredging pointless.
Speaking on behalf of Britian's agricultural landowners (three-quarters of the land by area, one or two percent by value):
Amid all the devastation and recrimination over the floods in Cumbria hardly anybody mentions one factor that may not be the sole cause, but certainly hasn’t helped. That is the almost complete cessation of dredging of our rivers since we were required to accept the European Water Framework Directive (EWF) into UK law in 2000...
It was obvious to people, who depended on the land for their living that failing to keep the rivers clear of sand and gravel would cause them to burst their banks and destroy in a few hours fertility that had taken generations to create, wash away their houses, and drown their livestock… all this changed with the creation of the Environment Agency in 1997 and when we adopted the European Water Framework Directive in 2000. No longer were the authorities charged with a duty to prevent flooding. Instead, the emphasis shifted, in an astonishing reversal of policy, to a primary obligation to achieve ‘good ecological status’ for our national rivers. This is defined as being as close as possible to ‘undisturbed natural conditions.
… they all have the same aim, entirely consonant [sic] with EU policy, to return rivers to their ‘natural healthy’ state, reversing any ‘straightening and modifying’ which was done in ‘a misguided attempt to get water off the land quicker’. They only think it ‘misguided’ because fast flowing water contained within its banks can scour out its bed and maybe wash out some rare crayfish or freshwater mussel, and that conflicts with their (and the EU’s) ideal of a ‘natural’ river.
So dredging good; trees (for which there are no subsidies) and rewilding bad.
The only thing that everybody seems to agree on is that we shouldn't allow building on flood plains, obviously, but that doesn't help people in long established towns.
I know I did a Fun Online Poll on this last year, but let's narrow it down a bit to those two contrasting points of view without an 'other' option.
(I'm always happy to blame the EU when things go wrong, but the EU is also to blame for the subsidies for clearing trees so that's a worst-of-both-worlds as per usual.)
Vote here or use the widget in the sidebar.
From City AM's dedicated property porn magazine, Bespoke Living (page20), on the subject of derelict buildings in London:
"Often the owners are not even looking to sell. It might be that they have plans for the building but planning permission can take years to come through. Or maybe they see the land as an investment and they're happy just to sit and watch its value increase. You could do this for decades without developing and still make a huge profit on your investment."
Sunday, 27 December 2015
Saturday, 26 December 2015
I watched Ted 2 yesterday with three of my children (aged between 13 and 26) and basically we laughed and giggled non-stop for the whole two hours. We chose the 'unrated' version rather than the 'theatrical' version, I don't know if the theatrical version was as good - if you cut out all the swearing, you'd only have about ten minutes of footage left.
It helps if you've seen the first one I suppose, it might not make quite as much sense on its own. Apart from that, I shall not bother summarising the plot or the characters or anything, it is what it is.
Ten out ten.
Thursday, 24 December 2015
Baldilocks, in The Telegraph:
For me, there will be two other major factors, which have not yet featured much in the early jousting ahead of the referendum, but which cannot be ignored.
One is that, amid all the clumsy bureaucracy and failed ideas, the EU has provided the structure and the standards for new democracies across central Europe to establish themselves after their many decades of tyranny and tragedy... We still need the EU to provide the safe harbour for the docking of fragile democracies, and it would be strange to champion that idea but abandon it ourselves.
This is true actually, if we gloss over the time lag between independence from the USSR (1991) and joining the EU (2004 or 2007) which suggests there is little or no link at all. Leaders of 'new' democracies in eastern Europe seemed to be pretty keen for their countries to become member states of the EU, and the EU in turn demanded certain reforms vis a vis corruption before they were allowed in, and so on. See also Turkey.
All good stuff, but those countries could not give a hoot whether the UK remains a member state or not, and it appears unlikely that the people in the UK are keen for the UK to open its borders to them. So on balance, that's still an argument for leaving.
The second factor is a related one: whatever the shortcomings of the European “project” it is manifestly not in our interests for either it or the United Kingdom to fall apart. Such will be the challenges to the western world in the coming years, from a turbulent Middle East and a volatile world economy, that the dismembering of our own country by nationalists or the breaking up of Europe into uncontrolled rivalry would make many dangers more threatening still.
What 'uncontrolled rivalry'? He is hallucinating. Each country's interests are what they are (although Merkel seems to have lost the plot and is acting counter to the interests of the German general public) whether they are member states of the EU or not.
If this 'uncontrolled rivalry' is fought out between large countries at EU level, it can then be imposed on all the other member states. Without the EU, would one country be able to force another country to set maximum working hours, to grant asylum to
terroristsrefugees or pay welfare benefits to foreigners? Methinks not.
And by and large, western European countries have many more common interests than ones which divide them, in particular security. Which is why most are members of NATO, for example. Or free trade, which is perfectly possible without the EU.
So again, that's more of an argument for leaving.
There is no doubt that without the United Kingdom, the EU would be weaker. It would lose the fifth largest economy of the world, the continent’s greatest centre of finance, and one of its only two respected military powers. We will have to ask, disliking so many aspects of it as we do, whether we really want to weaken it…
Wot? It is highly unlikely that the other member states would dissolve the EU if we left, so he's talking crap. And if us leaving somehow triggered its dissolution, then that means we did the right thing. Yet another argument for leaving.
… and at the same time increase the chances, if the UK left the EU, of Scotland leaving the UK. Scottish nationalists would jump at the chance to reverse the argument of last year’s referendum – now it would be them saying they would stay in Europe without us. They would have the pretext for their second referendum, and the result of it could well be too close to call.
I see no harm in Scotland having another independence referendum every ten or twenty years, fair's fair, and personally I am not bothered whether the Scots want to remain members of the UK or not. I live in England and it is none of my business. But Scotland is an entirely separate topic so a non-argument in this context.
To end up destroying the United Kingdom and gravely weakening the European Union would not be a very clever day’s work.
He sure talks some shit. The UK would be no more 'destroyed' if Scotland, barely one-tenth of the whole, became independent than it was 'destroyed' when the most of Ireland become a separate country, or Czechoslovakia was 'destroyed' when it was demerged into Czech Republic and Slovakia, two countries which are doing fine and still co-operate quite closely in many ways.
Would the epically corrupt Hague really spend the rest of his life campaigning for Scotland to rejoin the UK? Has he ever pleaded with Ireland to rejoin the UK or with the two Czechoslovak successor countries to merge again, and can he explain why they should? Would he campaign for the UK to become a member state of the EU if it wasn't one already? More epic fails and non-arguments.
Crass exaggeration and hyperbole does not amount to an argument, you self-pitying bald fucker. Having thought about your arguments while writing this post, I now look upon Brexit even more favourably than I did this morning.
From the BBC:
A woman died and five people were hurt when a car ploughed into a coffee shop.
The woman in her 70s was declared dead at the scene after the Audi crashed into Costa on The Green, Westerham, Kent at 10:30 GMT. South East Coast Ambulance (Secamb) said five more people were taken to hospital, four with serious injuries and one with minor injuries.
The centre of Westerham was closed while emergency services remained at the scene.
From the BBC:
At least 13 people were hurt when a bus hit the offices of a guide dog charity after a collision involving a car.
The single-decker crashed near Peterborough city centre at about 11:43 GMT, Cambridgeshire Police said. There were no fatalities and all the casualties had what were described as minor injuries. Nobody in the building was hurt.
Stagecoach confirmed one of its buses had been in the crash with a car. The road was cordoned-off near Church Walk.
It's the new cows, I'm telling you.
Wednesday, 23 December 2015
From the BBC
Afghan government forces have lost control of the centre of the town of Sangin in Helmand province after days of fierce fighting, reports suggest.
Officials told the BBC that the Taliban controlled the local government building and police station.
The Taliban say their fighters have seized the entire district and that their flag is flying over Sangin.
Yet another example of the West treating the rest of the world like the West. We continue to treat countries that are not industrialised, where the incentives are to grab land as though they are industrialised (where the incentives are to make a cheaper computer or handbag).
Someone out there might connect these two histories:
Install weak government
Strong militia takes part of the country a few years later
Install weak government
Strong militia takes part of the country a few years later
The only solution to places like Afghanistan is to find a way to industrialise them. That's what gives you democracy, human rights and so forth.
Parts of Great Britain likely to be hit by flooding and which sound similar, if you say them in the local language.
Tuesday, 22 December 2015
The wife and I did some pre-Xmas shopping today.
The staff at Tesco were wearing T-shirts with the following slogan on the back:
If there is anything we can do to help
Let us know
Let us know
Let us know
One item on our shopping list was 'biscuits for cheese'.
How could we not snap up a box of these..?
Sent in by Carol Wilcox to the FT:
I have just learned from a session of the House of Lords enquiry into the housing market that since 1951 the population of London has increased by 5 per cent. I don’t know whether its housing stock has kept pace*, but the real price of London houses has increased sixfold.
This does not seem to support Professor Muellbauer's assertion, in his letter of 21 December, that the main cause of exorbitant house price inflation is supply not keeping up with income and population growth.
I would say that it has more to do with the fact that the owners of £multi million homes in Westminster pay just £1,345.48 Council Tax, less than that paid by tenants of a £599 per month flat in Weymouth.**
* It has far more than kept pace, of course.
** While relevant to the regressive nature of Council Tax, that is not the relevant comparison here, the point is that current Council Tax in London is very low compared to what Domestic Rates would be if they had been indexed up in line with rental values since 1951. And the abandonment of rent controls and mortgage-to-income caps in the 1980s had a much bigger influence.
Monday, 21 December 2015
The results to last week's Fun Online Poll were as follows:
How much of their income do major UK charities actually spend on charitable causes?
Next to nothing - 21%
A quarter - 41%
Half - 25%
Three quarters - 8%
Nearly all - 5%
It appears that taking major UK 'charities' as a whole, 'about half' is the correct answer, some do worse, some do better.
I think there are two separate issues here. The people at the top - an army of trustees, directors, advisors, auditors and lawyers - just help themselves.
And then there is the issue of fund raising. See my earlier post. A charity ends up as a profit maximising organisation, so if they can spend £9 on fund raising to generate £10 in donations, they will do so. Little wonder that some charities spend most of their 'income' on fund raising.
This week's Fun Online Poll...
It appears to me that most of the candidates in the BBC's list of finalists have not done anything remarkable this year and/or have a distinct lack of personality i.e. they will do or say nothing to upset their sponsors or The Establishment i.e. the BBC.
So let's do the decent thing and have a Sports Lack Of Personality Of The Year Award. Please vote for the candidate who has achieved least in the last twelve months; does not appear to utter anything apart from platitudes; and/or who appears most often in advertisements. Failing that, just vote for somebody you've never heard of (half of them, in my case).
Vote here or use the widget in the sidebar. Just to lighten things up, you are allowed one vote per day if you feel that more than one person meets all those criteria.
Saturday, 19 December 2015
Buried somewhere in the hundreds of pages of the Scottish Local Tax Commission's report and supporting schedules (I can't find it again) was a new one, the first new one I've seen for years. It went roughly like this:
If we have a property tax (i.e. LVT) to cover part of local government spending which is payable by the owner, not the occupant, then this breaks the link between local democracy, local taxation and local spending decisions.
Owner-occupiers want sensible spending so there is an incentive for them to turn out and vote, but tenants will be less likely to vote.
a. Turnouts at local elections are currently very low, presumably because people know that councils only have limited flexibility on how much or little they spend, what they do and how high or low Council Tax is.
b. Older people are more likely to vote than younger people and owner-occupiers are far more likely to vote than tenants, who are usually younger.
c. Younger people/tenants are likely to only live in any area for a few years, are less likely to be registered to vote and less likely to use 'local services', having finished school and seldom being in need of regular NHS treatment.
So it is quite possible that in some local elections, no younger people/tenants vote at all. On that basis, the position can hardly get worse, whoever pays the tax.
This argument is also the equal and opposite to the tried and tested one:
"If landlords have to pay the tax, not tenants, then tenants will always vote for more local services and higher taxes."
So either the first argument is correct or the second one is, more likely neither and it is irrelevant anyway. As long as everybody has the right to vote, it is up to them if they don't bother.
The next KLN in the canon adds a third contradiction:
"Tenants will pay nothing so homeowners will end up paying all the tax."
Which is also nonsense; if 80% of homes are owner-occupied they will end up paying 80% of the tax.
What all three arguments miss is that if more taxes were collected from land values (and less from output and employment), there would be less concentration of land wealth which inevitably means that many more households will be owner-occupiers (as we saw from the 1940s to the 1980s when we had Georgism-lite in the form of rent and mortgage caps etc).
In which case, the legal and economic incidence of the tax will be the same and the people paying it will be the ones who benefit from sensible local spending but who don't want wasteful spending or high taxes. Everything is now aligned nicely and it will all sort itself out.
Friday, 18 December 2015
My kids had their joint birthday party recently and it was my turn to do the quiz. As they are both teenagers, I did a multiple choice where the answers are numbers from 13 to 19 inclusive:
Only one person beat the pass mark of 15 out of 30:
1. A square number
2. How many pounds in a stone
3. 1990s boy band named after a London area postcode
4. In what year are they planning to hold a referendum on EU membership in the UK
5. How many minutes long is "Voodoo Chile" on Jimi Hendrix's 1968 double album "Electric Ladyland"
6. Looks like a triangle
7. "The Answer to the Ultimate Question of Life, the Universe, and Everything" divided by three
8. "Surfin' USA" by the Beach Boys was set to the music of this Chuck Berry hit
9. House number where I…, C… and H.. used to live
10. Looks like the letter B
11. Hit song by One Direction
12. Number of stripes in USA flag (representing the British colonies that declared independence in 1776)
13. Atomic number of silicon
14. Average age of a soldier in Vietnam according to the 1985 chart-topping single by Paul Hardcastle
15. Last Apollo mission to land on The Moon
16. Atomic mass of oxygen
17. How many months in a leap year in the Hebrew calendar
18. Body-swap film starring Zac Efron and Chandler out of "Friends"
19. In 2015, Mark & A... celebrated their …th wedding anniversary
20. Players in a Rugby Union team
21. Square root of CCLXXXIX
22. How many digits did Horatio Nelson have when he died
23. Players in a Rugby League team
24. Casual/modern British restaurant staffed by disadvantaged youngsters trained by Jamie Oliver
25. Days between new moon and full moon
26. The date today
27. Twice a square number
28. How many UK Top Ten hits did ABBA have
29. How many days in "une quinzaine"
30. The sum of the first three squares (which makes it a square pyramidal number)
Tuesday, 15 December 2015
Via MBK from The Times:
Scottish council tax reform will take years and hit middle earners
A good start with putting the most negative possible spin on the report, which was a bit wishy washy to say the least.
If annual taxes on housing were more proportional to actual values, it will be people who own valuable housing who would pay more on an annual basis, however much or little they earn, not middle earners who rent or who own normal homes; and whether they are 'hit' all depends on what other taxes you replace (for example LBTT).
And why would it take years?
The Times quotes from the report:
New primary legislation to establish a wholly new system of local tax could not be delivered before the local government elections in 2017... Structures already exist to administer alternative property taxes, but transition would still incur costs and take a number of years to implement — even more so if land was to be taxed separately.
The first bit is a lie. All the legislation is in place, they just need to use the powers they already have.
The last bit is beyond a lie, although I have heard it many a time before.
LVT is just a variant of existing annual taxes on land and buildings like Council Tax (which was enacted and all the valuations done within a few months) or Business Rates. You can make Council Tax less proportional to values so it is more like a Poll Tax; or more proportional so it is more like LVT; or you can make a deduction for bricks and mortar and apply a higher rate to the smaller tax base and it is LVT. Or indeed you could make Council Tax more like income tax by setting it much higher and giving discounts to people on lower incomes. That's all. Big deal.
As to "costs and a number of years to implement", for a low level LVT (or a proportional property tax), it doesn't really matter whether you use rental values or selling prices and whether you make an allowance for the bricks and mortar element or not.
And the last thing you need is home-by-home or plot-by-plot individual valuations, you just work out local average values from existing databases, rank all homes/plots by size and then allocate them to bands, you can use the existing 8 1/2 Council Tax bands. This will take half the time of the Council Tax valuation/banding exercise. The value then ascribed to each building or plot doesn't need to be particularly 'accurate' either in an intellectual sense, as long as the same method of averaging and apportioning is applied consistently and fairly to all buildings/plots.
537th man in space. Also happens to come from Britain. Big whoop.
The results to last week's Fun Online Polls were as follows:
Which is the most relevant measure of poverty or inequality?
Total income minus tax and housing costs - 66%
Total assets - 24%
Total income - 9%
Total assets excl. value of main residence - 1%
That is a pretty clear result, and surely the correct one. I can see why 'Total assets' came second, especially if you assume this to mean 'total value of land owned' i.e. the equal and opposite of 'total income minus tax and housing costs'.
And as we well know, the way to reduce this kind of poverty or inequality is not more downwards redistribution via the welfare system. That will not help those being totally f-ed over by the system, i.e. working tenants. The best way is to have less upwards redistribution via the tax system, i.e. tax output and employment a lot less and tax land values a lot more.
To this week's Fun Online Poll:
How much of their income do major UK charities actually spend on charitable causes?
Vote here or use the widget in the sidebar.
Once you've cast your vote, read the surprisingly well researched article in the Daily Mail.
Monday, 14 December 2015
From The Daily Mail:
The Essex girl who is set to become a £6million superstar: How a builder's daughter who lives with her mum in a £250,000 terrace home became the X Factor's youngest EVER winner aged 17
From The Guardian:
Declan Gaffney (Even in Finland, universal basic income is too good to be true, 10 December)* is right: a universal basic income, or citizen’s income – an unconditional income for every individual citizen – is a lovely idea. It would provide a secure financial floor on which everyone could build; it would make it easier for people to earn their way out of poverty; it would remove intrusive government bureaucracy from a lot of people’s lives; it would enhance social cohesion.
There are 101 Reasons for a Citizen’s Income (if anyone is in any doubt about that, then the Policy Press will gladly sell them a book with that title). And yes, a citizen’s income is a useful thought experiment against which to judge proposed changes to the benefits system. But it’s more than that. It really is feasible. Research results published by the Institute for Social and Economic Research show that there are at least two practical ways to implement a citizen’s income and that one of those methods could implement it very quickly: which could be helpful if universal credit proves impossible to implement.
The high-profile new elements in the debate are the Finnish and Utrecht pilot projects, and the Swiss referendum next year. Equally important is the number of UK thinktanks now running their own research projects. The Adam Smith Institute has recently published a paper on a variant, negative income tax; and Compass, the Fabian Society, and Royal Society of Arts are researching the feasibility. The debate on citizen’s income has shifted from being a debate about its desirability to being one about its feasibility. The next stage might be a debate about how to implement it in the UK before everyone else beats us to it.
Dr Malcolm Torry, Director, Citizen’s Income Trust
* The article itself was the usual hatchet job by an authoritarian socialist.
Sunday, 13 December 2015
From The Daily Mail, last week:
These are Britain's oldest working Christmas fairy lights - which are so ancient the woman who bought them as a teen has now moved into an old people's home.
Vina Shaddick, 61, got the string of colourful illuminations for her festive tree from Woolworths in 1969.
It came with a spare set of bulbs but she's only had to use one - and they have taken pride of place on her family's Christmas tree ever since.
It reminds me a lot of a story they ran a year ago:
Glowing brightly on the tree, these colourful fairy lights look like they could have been bought yesterday.
But they were actually purchased on a trip to Woolworths – 45 years ago. Vina Shaddick has displayed them proudly in her living room every Christmas since 1969, and has only had to change one bulb.
Rather mysteriously, she was 65 a year ago but only 61 this year, but this does not detract from the general point.
I also have two strings of Woolies Xmas lights which have been up for at least the last fifteen Decembers and are still going strong.
Unlike Xmas lights from Homebase - I had a couple of sets which lasted maybe five or ten years and then died on me. I bought some this year which lasted precisely one week, but as they only cost a tenner for 160 lights, you have to take that on the chin, I suppose.
Friday, 11 December 2015
From City AM:
Why the war on buy-to-let will make the UK housing crisis worse
While the RLA is clear on the need for landlords not to take on mortgages that they are unable to afford, it cannot be forgotten that the housing market would be in the doldrums if it were not for the private rental market.
Government figures show that, of the 3m new dwellings created in England between 1996 and 2013, 83 per cent were private homes to rent...
As Ben Jamin' patiently explained last week, there is no 'housing crisis' it is a 'transfer of wealth crisis'. And where is that wealth going?
A lot of it is going to landlords and bankers of course, who are basically just leveraging up land price increases, but…
… Developers have come to rely on investors buying “off-plan” to fund new homes. As ministers have acknowledged, the private rented sector provides the housing needed to support and encourage a flexible labour market.
Strange. In the good old days, since the dawn of time up until about twenty years ago, BTL landlords didn't buy any new homes - landlords were net sellers for the whole of the 20th century - and nobody bought them "off-plan". Land cost the developers next to nothing and homes were sold for their build cost plus reasonable profit margin, homes only take 6 to 12 months to build so there were not huge amounts of cash tied up in work in progress. They were called 'speculative builders' not in a pejorative sense, but because they were taking a punt with their own money.
So why do developers need so much cash up front nowadays? To pay for the land, of course. That's where the wealth is disappearing, in inflated land prices.
From City AM:
Research conducted for the Residential Landlords Association (RLA) has also shown that each tenancy in the private sector nets the Treasury in the region of £1,000. Buy-to-let, far from enjoying a privileged status within the housing market, is a net contributor to the government’s coffers.
Yes, I have also calculated this figure as best I could and private landlords appear to be paying about £5 billion a year in income tax and other bits and pieces, = 5 million rented homes x £1,000 each.
That's half the truth. And a complete lie...
The bit he doesn't mention is that private landlords collect £9 or £10 billion in Housing Benefit every year, which is a drain on 'the government's coffers'.
Net the two figures off, and overall we see that private landlords are a drain on 'the government's coffers' of £4 or £5 billion a year.
That's the whole truth.
Via MBK, The Times on stomach churning top form:
Runaway house prices are forcing hundreds of thousands of middle-class families into the hands of rogue landlords, a study has found.
More than 200,000 households earning more than £30,000 a year are renting homes with a “category 1” hazard, which can include rat infestations, unsafe electrics, cold and damp, according to a report by the Citizens Advice charity and the New Policy Institute think tank.
Almost 130,000 of these households earn more than £40,000, suggesting that the blight of rogue landlords is not exclusive to those at the bottom of the social ladder…
Thursday, 10 December 2015
Posted by Bayard at 17:45
Wednesday, 9 December 2015
Cow attacks and sinkholes have gone mainstream, so I shall mainly be raising awareness of car attacks like this one.
Tuesday, 8 December 2015
From the BBC
Police are investigating an allegation of hate crime against world heavyweight boxing champion Tyson Fury.
Greater Manchester Police received a call earlier after comments made about homosexuality on the BBC's Victoria Derbyshire programme.
"We take every allegation of hate crime extremely seriously and we will be attending the victim's address to take a statement," a GMP spokeswoman said.
Some nobhead makes some dumb, harmless remarks about homosexuals (not a crime) and they're all over it, but they still haven't found my laptop that got nicked near Wythenshawe from a decade ago (crime).
From The Guardian:
The leading Labour moderate Tristram Hunt moved to reclaim the issue of inequality for his wing of the Labour party, calling for a property wealth tax [and] reversal of cuts to inheritance tax... within 100 days of a Labour government coming to power.
Making the case for a property wealth tax to replace the existing regressive council tax, Hunt pointed out that 14 OECD countries – including the US – raise a recurring tax on the value of residential property. An annual 0.5% tax upon the value of each property – less than most countries – would completely cover the cost of replacing the council tax, he said.
The tax would be raised on owners not occupiers, taking “generation rent” completely out of local taxes altogether.
He might as well just call it "Domestic Rates" and have done with it.
As per usual he is way off piste with Inheritance Tax though. It raises laughably little money, so you could get rid of that as well and bump up the Domestic Rates from 0.5% to 0.55% and keep going from there. SDLT, CGT and the TV licence fee are the next obvious candidates to be replaced, which would require a total rate of 0.65% or something like that.
My wife will be wondering why I am rejoicing at the fact that our Council Tax bill just went up by £1,700 a year, but needs must.
Monday, 7 December 2015
The results to last week's Fun Online Poll:
If the UK bombs ISIS targets in Syria, this will…
Make us safer from terrorist attacks - 1%
Make us more a more likely target - 17%
Not make any measurable difference - 14%
Be a waste of money better spent controlling our borders and combatting domestic terrorism - 63%
Other, please specify - 5%
A clear majority for common sense from a good turnout of 150 votes. Thank you everybody who took part.
Suggestions for "other" included:
Graeme: Wouldn't it be nice if the people who want to go bombing thought instead about ways of stopping the flow of funds and weaponry to Isil?
Yes, I should have added that to the list of sensible ways of spending money, but Pollcode has a limit on how long the answers can be. And, if we have absolutley fair to Cameron, it appears that the RAF is bombing primarily oil wells, which is one way of doing it.
And slightly more left field:
Enola Gay: The problem is not the bombing. The problem is that the bombs will be sub-atomic.
This week, as a follow up to point 6 of Ben Jamin's recent post…
Which is the most relevant measure of poverty or inequality:
Total assets excl. value of main residence*
Total income minus tax and housing costs
There's no "other" because we'd just end up with endless permutations.
Vote here or use the widget in the sidebar.
* The third option might sound a bit weird, but is the basis for many means tested benefits. For example, if you have a low income but £16,000 or more cash/investments, you get no Housing or Council Tax benefit or Pensions Credit (or their localised replacements and I know that the rules are slightly different for each and there's a Pension Credit Savings Credit to mitigate this). But if you have a low income, no savings and live in a £1 million home, you can still claim Council Tax Benefit and Pensions Credit.
To sum up: a tenant with a low income and £16,000 savings can fuck off, he is not considered to be poor. A home-owner with a low income and no savings and a £1 million house is a charity case and gets all the goodies.
From City AM:
Just days after George Osborne announced his latest mass of adjustments to Britain’s tax and spend system, reports from Finland revealed that its government is looking into a somewhat simpler policy – giving each Finn €800 (£576) a month.
This may seem like madness. Why, I’m sure many of you will ask, should folk be handed money purely for existing? Won’t people respond by just sitting around doing nothing? Evidence suggests not. In fact, the Finnish experiment – if it goes ahead – is designed to reduce unemployment, which currently stands at over nine per cent...
And so on, all good stuff.
The interesting bit is this: "the policy, despite sounding – prima facie – like a left-wing fantasy, has been endorsed over the decades by pro-market economists such as Milton Friedman... This proposal is similar to a system endorsed by the free-market Adam Smith Institute called a 'negative income tax'."
That struck me after the vote on whether RAF planes should bomb Syria. Proper 'left wing' MPs voted against (Greens and most of the Labour Party), as did a few proper 'right wing/libertarian' MPs' such as David Davies and Peter Hollobone. Nigel Farage MEP also came out against.
So there are overlaps between 'fantasy left' and 'free-market/libertarian'. There are plenty of other examples, like legalising drugs or replacing taxes on earnings and output with LVT. The two groups give different reasons for supporting the policy, but they both come to the right conclusion, which is the main thing.
Hence and why I am perfectly happy to describe myself as "left/libertarian", which of course means I get shot by all sides, from the greenies, socialists, Conservatives, Homeys and Faux Libertarians alike.
Sunday, 6 December 2015
If there is one thing that unites everyone in the UK, it’s that we have a housing crisis. The reasoning behind this consensus goes something like this:
a) Too many households cannot afford to buy their own home and many are struggling to pay the rent.
b) This must be down to excessive demand and a housing shortage.
c) This shortage is all the fault of those meddling planners, NIMBYs and/or net immigration.
d) We need to build at least 300,000 new homes per year to keep pace with growing demand.
Unfortunately, this reasoning is based on a fundamental mistake that land has a net cost, like capital does. As land is everything not supplied by human effort, it cannot by definition have a net cost.
1. We do not have thousands of families sleeping rough. Yes, tens of thousands may technically be “homeless”, but barring a few thousand rough sleepers, everyone in the UK has a roof over their heads. Furthermore, we have over half a million empty homes and tens of millions of spare bedrooms. We certainly do not have a shortage of physical housing in the UK.
2. We all know that due to the rabbit hutch rubbish our highly profitable property companies have been peddling for decades, the cost of the actual buildings has fallen. What has gone up is the selling price of the location that housing occupies.
3. Unlike capital (the building), location (the land) has no cost of production. The rental value of the location is capitalised into selling prices and mortgage interest is only a transfer, not a net cost.
4. If rents and mortgage interest are not a net cost, then the high price of location cannot make housing unaffordable in aggregate. If there is a net transfer of wealth and welfare, then housing may well be unaffordable for one group, but this transfer will act in an equal and opposite way as a subsidy for another group. To say housing is unaffordable due to the high selling prices/rental income of locations is therefore utterly fallacious.
5. If we are concerned about affordability for one group vs another, we should first define how we measure this. House prices as a ratio of gross income do not reflect true affordability as this does not take into account taxation. The better measure of housing costs is annual rents or mortgage interest as a proportion of post-tax income. Similarly, “gross income” or “total asset wealth” are poor measures of inequality or poverty; the better measure is “net disposable income after tax and housing costs”.
6. There will be a net transfer and inequality if two groups (A and B) have similar gross incomes and pay similar amounts of tax but Group A owns little or no land by value and Group B are owner-occupiers and/or landlords. Group A will have lower discretionary incomes and group B higher discretionary incomes. There is a net transfer from A to B, directly via the rents they pay and indirectly via the taxes they pay.
If Groups C and D each own the same amount of land but Group C has higher earned income and pays more tax, then although there is inequality there is still a net transfer from Group C to Group D via the tax system.
7. It is widely believed that the best way to deal with this transfer that makes housing unaffordable for group A, is to lower aggregate selling prices by building more homes. But because our current system of taxation is essentially flat, to end this transfer the value of all land would have to drop to zero. Or the equivalent of a two-thirds fall in house prices. While this is desirable, it is unimaginable this could be achieved by changes to planning, unless we plan to irradiate our urban centres with nuclear fallout, which would certainly outweigh any benefits.
8. It is a commonplace that building extra housing will lower aggregate house prices. As the value of location is derived solely from agglomeration effects, it can be argued that adding capacity where demand is highest will simply suck in more people, increasing aggregate land values in that area (prices will only fall in the areas with no new construction and net emigration). This will also tend to increase the rates of under-occupation and vacancy, particularly in already marginal locations. This is the very opposite of The Northern Powerhouse policy, as it will only further distort our economy towards London and the SE.
9. In short, while the impact on affordability of building extra housing is questionable, the fact that it will simply be adding to our already inefficient land/immovable property market and exacerbate our excessive North/South divide is not. The only groups like to gain from “build, build, build” policies are the usual suspects - banks, landlords and those who make windfall gains when planning consent is granted (agricultural land owners in outer-suburban areas and home builders who between them own land with planning or near planning for half a million homes).
10. If our so called “housing crisis” is actually a “transfer of wealth” crisis, caused by taxing earned income and return on capital instead of using land rent for public revenue, then changing our tax system is surely a simpler, more efficient and more certain way of ending that net transfer.
11. For a typical working UK household, a shift away from taxing income/capital to taxing land would result in them being around £11K a year better off. If land was always taxed at 100% of its rental value, its selling price should drop zero. The resulting fall in mortgage payments for a typical new buyer would see them save a further £6.5K per year. Taken together, housing affordability as a ratio of house prices to discretionary income for a typical household increases four-fold.
12. If everyone paid rent for the land they occupied, instead of enjoying it tax-free as owner-occupiers do now, we would see optimal allocational efficiency in the land and housing market, reducing vacancies and under-occupation. To what extent this would nullify the need to build extra housing to deal with a rising population is unknown, but without doubt we wouldn’t need 300,000 extra per year for the foreseeable future.
13. Taxing wealth creation instead of land rents not only produces inequality on a societal level but a regional one too. Those regions outside London and the SE, like individuals in group A, are overtaxed. A tax shift as described above levels the playing field for all participants so for those regions, their tax liabilities would be far lower than today; around £100bn per year lower. This would attract investment and demand to exactly where capacity for it is at its highest.
To summarise; High land values reflect the efficient exploitation of the agglomeration effects that lead to high wages and high amenity levels in preference to private capital. Any planning restrictions that lower agglomeration effects will negatively impact aggregate land values. High land values are thus a positive indicator of wealth and economic welfare. High land values only have a negative impact when they are capitalised into selling prices and lead to transfers of earned income. This causes distorted incentives and excessive inequality. The main symptom being our so-called Housing Crisis.
But, as I hope I’ve argued above, our “Housing Crisis” is in reality a “Transfer of Wealth Crisis”. Or a crisis of basic economic justice to be more accurate, which in the long run makes us all poorer, not just excessively unequal.
Saturday, 5 December 2015
Let's compare the families in three of my household's favourites: The Simpsons, Family Guy and The Goldbergs:
Homer, Peter, Murray
Fat slobs in not very exciting or ambitious jobs. Politically disinterested and very politically incorrect and undiplomatic. Very lax approach to parenting. It is never clear why they got married and had children in the first place but they love their wives by default, by force of habit as much as anything.
Marge, Lois, Beverley
Full time housewives. Relatively attractive. Married beneath themselves but seem to love their husbands - it is never quite clear why. More politically aware: Marge is more Democrat and Beverley is more Republican. Pushy with their husbands and ambitious for their children.
Bart, Chris, Barry
The first-born son. Do badly at school, lazy around the house but adventurous or at least in their own imaginations. Bully their siblings.
Lisa, Meg, Erica
The first-born daughter. Look down on the rest of their family, are bullied by them and get their own back by scheming. Do well at school. Politically engaged, ready to take up left wing causes like the environment etc.
Maggie, Stewie, Adam
The youngest child/the baby. Maggie just an eternal baby. Stewie is an evil genius and Adam is a documentary film maker, but both have rich fantasy lives.
Friday, 4 December 2015
From the BBC
Buckingham Palace has apologised for giving a knighthood to shit comic Lenny Henry instead of TV cook Ainsley Harriott.
The gaffe was picked up by a number of viewers, among them Sanjeev Bhaskar, who suggested the palace had "misunderstood comedy".
Buckingham Palace blamed the mistake on "Philip getting a bit confused".
"Petition for boxer to be removed from BBC Sports Lack Of Personality of the Year shortlist gains over 30,000 signatures"
From The Independent:
Campaigners are urging the BBC to pull Tyson Fury from the Sports Lack of Personality of the Year (SLOPOTY) shortlist amid accusations that he does not simply spout platitudes but actually speaks his own odious mind after a petition reached over 30,000 signatures.
The heavyweight boxing champion was announced as one of the sports people shortlisted for the annual award after his victory over tri-lingual Ukrainian psychopath Wladimir Klitschko on Saturday.
Fury features on the list alongside athletes including the pleasant, inoffensive and otherwise thoroughly unremarkable Jessica Ennis-Hill, Mo Farah and Greg Rutherford. The final winner is chosen by a public vote on 20 December.
Thursday, 3 December 2015
From Wiki and Wiki:
The Lady in Red In the Van tells the true crime story of poor farmer's daughter, Miss Mary Shepherd, who leaves for Chicago, where she is sent to prison, serves as prostitute, falls in love with a criminal and tries bank robbery before ending up living in a van in Alan Bennett’s driveway in the London Borough of Camden.
From The Evening Standard:
Zoopla founder Alex Chesterman said the extra 3% on stamp duty for second homes and buy-to-let investors was “not a particularly helpful policy to solving the supply problem”.
He said: “More housing - great. Further taxes on the market - not necessarily great. It may move some marginal supply from the rental market into the sale market but that has negative repercussions on the rental market. You will see fewer rental properties in the private sector... and higher rents.”
He didn't stopp as low as suggesting the extra 3% SDLT will 'force landlords to put up rents', instead he has gone for a variation of the disappearing homes conundrum.
OK, let us accept that at the margin, a few more homes will be bought by owner-occupiers rather than landlords, because the former group are now effectively bidding 3% more than the latter. That is the whole point.
Let's focus on one single one of those homes, the landlord's bid has been turned down and the owner-occupier's bid, being ever so slightly higher, is about to be accepted.
If Chesterman's logic is correct, the owner-occupier should promptly withdraw his offer and allow the landlord to buy the home and then rent it from him, the rent now being ever so slightly cheaper than it was before. This slight rent saving will more than compensate the tenant for foregoing the benefits of being an owner-occupier.
Did he really think that one through?
Wednesday, 2 December 2015
A mildly interesting article at the BBC on the subject.
But really this is about agglomeration benefits.
At one extreme, there are the multi-£-million buy-to-leave flats in London standing empty. The only thing which gives them value is the fact that they are in London i.e. agglomeration benefits (actual or potential).
At the other end, the abandoned streets in seaside towns, the reverse applies. If one house is standing empty in a road, it makes the area a bit less attractive and so depresses the value of the other houses a bit. If two are empty, that depresses the values by more than twice as much. The effect is geometric and reaches a tipping point, so once a third or half the homes on a street are empty, the others are now virtually unsaleable.
In which case, Liverpool was doing the right thing selling off a whole street for £1 each, that gets people back into the houses and kick starts the process again.
(In either case, LVT would have sorted it out, but that's by the by).
Tuesday, 1 December 2015
From the Guardian
Transport for London and British Transport police have urged commuters to come forward if they have received so-called fat-shaming postcards on the tube.
Images of the leaflet, claiming to be from a group called Overweight Haters Ltd, have now been shared thousands of times on social media, with many speculating it could be a poorly judged publicity stunt.
British Transport police (BTP) said they were investigating reports of cards being handed out but could not elaborate as to whether victims had complained directly.
It's not very nice, but what's the crime? Upsetting fat people?
Note: The "Stretched Police Resources" is for any news story involving the police where no crime, or something hardly warranting a crime, was committed.
Posted by The Stigler at 16:49