That'll help...

... struggling first time buyers to get on the property ladder. ... keep house prices as high as possible.

Home buyers using Help to Buy can now take out a 35-year mortgage

Bank of Mum and Dad

From the BBC:

Parents spend so much money to get their children onto the housing ladder that they are now among the biggest lenders in the UK, a survey suggests.

The average parental contribution for homebuyers this year is £24,100, up by more than £6,000 compared to last year, according to Legal & General (L&G).

Collectively parents have given £6.3bn, high enough to rank the bank of mum and dad 10th if it was a mortgage lender. Clydesdale Bank, the UK's 10th largest mortgage lender lent £5bn last year...

L&G's research, based on a poll of 1,600 parents, found more than half were using cash to help their children, but others were withdrawing money from their pensions or said they would consider using equity release from their homes.

Is it just me, or has the world gone completely mad?

Older generations, who own most of the housing, are taking out second mortgages to give their children money to buy housing?

At the level of an individual family, this might make a warped sort of sense, but collectively is is a massive Ponzi/pyramid scheme. Old people borrow money to lend it to young people so that they can sell their assets to young people for inflated prices, there being no net gain to anybody apart from banks and large landowners.

I also wonder how many of those who borrow from BOMAD disclose the fact on their mortgage applications...

"Mapping the U.S. by Property Value Instead of Land Area"

Excellent article and graphics at CityLab.com, worth a visit, here's the crux of it:

Metrocosm’s June cartograms include one that compares the property value of NYC neighborhoods with various U.S. states. The total value of all the residential property in Kentucky ($300 billion) falls just short of the value of all the housing property in Queens ($317 billion). The housing value of the Upper East Side all by itself is greater than that of six states.

Where it gets really interesting is at the county level.

This cartogram, which compares property values between counties across the continental United States, looks like bad news from a gastroenterologist. What this in fact shows is that just a handful of counties account for the vast majority of property values in the U.S. The distortion is so severe that it doesn’t look like a map of the U.S. at all.
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I am sure this is the same for most developed countries, see for example London houses worth more than Scotland, Wales and north combined.

Half the reason is population, even if house prices were the same across the country, London has approx. the same population and same amount of housing as NI, Wales and Scotland combined. That's easy.

The kicker is that population density amplifies this (agglomeration effects), so even if London's population were only half what it is and the same as Scotland's, London housing, with lots of people and homes in a fairly small area would be worth more than housing in Scotland, scattered across a much wider area.

So if anybody says "Land Value Tax would be a tax on London", that's quite true (I'm never sure whether this is an argument for or against LVT). Within London, land in the very centre (Zone 1) would probably be half the total, and land in the City and a few streets in the West End would be half of the total of Zone 1, and so on.

Killer Arguments Against LVT, Not (468)

From The Sun:

LABOUR are plotting a “punitive” tax raid on Middle England that would add nearly £400 to the average council tax bill.

Tory Ministers leapt on incendiary Venezuelan-style proposals* for a blistering new levy based on the value of everybody’s home...

* Strange. It would be more accurate to point out that the proposed system would be very similar to Domestic Rates in Northern Ireland, only without the £400,000 cap, which makes it closer to residential property taxes in the USA (where the rates are usually much higher than the 0.7% proposed here and which is the base rate in Northern Ireland, plus local precepts, so in some areas in NI, the final rate is 0.8% or 0.9%).

The highlight is the first comment:

BewareRedFlag: Its OK for multi millionaire politicians like corbyn [sic] he can afford it. Progressive taxation robs those on median incomes and below of their disposal [sic] income. Labour lied about brexit, they lie and will hammer the working class for tax, forget the £80k tax threshold they want to double foreign aid how dies [sic] that benefit you?

Commenter clearly doesn't understand what "progressive" means. Corbyn would end up paying about £7,000 a year or something. Bill for median home in the UK would be £1,400.

Ceteris Paribus

From here

Me: "[famers] can put up greenhouses anywhere (as long as it's not too steep). Mushrooms grow underground."

Bayard: "You still have to grow plants in something. If it was more economical to grow fruit and veg in polytunnels, everyone would be doing it already."

Well not necessarily.

The point was that dairy farmers claim to be worried about Brexit, for some reason they say milk prices will fall if they can't export it as easily, ignoring the fact that the UK might well be importing less milk and milk products as well, so it would largely cancel out and might even go in their favour.

But let's assume they are right.

The economics is this:

At present, with milk prices as they are, the most profitable use of a certain field is dairy. Putting up polytunnels to grow fruit and veg is less profitable. More income but more expenses. So the rational thing to do is dairy.

If milk prices fall sufficiently, dairy will less profitable or even loss making. At which stage, polytunnels and fruit and veg is the more profitable alternative. Probably not for Welsh hill sides used for insanely unprofitable sheep farming, but the best use for those hill sides is just let trees grow on them (or whatever grows naturally on Welsh hill sides).

Plus I'm not sure Bayard is even right. Take a train across the Netherlands and the entire countryside (the small gaps between towns) appears to be covered in polytunnels. And, despite being such a small country, the Netherlands is the second largest food exporter in the world (the article has a photo of the one single field not covered in polytunnels or surrounded by housing).

Nobody move or the refineries get hurt!

From the BBC:

The future of the UK's fuel refineries could be threatened by a no-deal Brexit, according to an internal local authority document seen by the BBC.

Under current government plans for no deal, they face a "danger to viability" from cheaper imports, while exports to the EU are set to be hit with tariffs.

Concern is widespread in an industry deemed crucial for both economic and national security...

National security??

From oil well to your car is a long, delicate thread, trailing halfway across the world, through all manner of political, religious, commercial, practical and technological eyes-of-needles (if that's what threads go through).

Our dependence on oil itself is a threat to national security, if we can skip a step and buy the end product cheaper from abroad, let's do it.

Tariff Doublethink

From the BBC:

A no-deal Brexit could cost the farming industry £850m a year in lost profits, new research seen by the BBC suggests...

OK, enlighten us.

Farm business consultants Andersons said that without government support increasing significantly, some farms would inevitably struggle to survive. The government says it will "provide direct support to boost some sectors in the unlikely event this is required".

We own land! Give us money!

Under a no-deal Brexit, farms could have to pay a tariff on goods exported to the EU for the first time. Lamb and live sheep exports could face tariffs of 45-50%, while trade and farming groups say some cuts of beef could see tariffs of more than 90%. If European firms suddenly start having to pay more for UK meat, the fear is they could quickly switch to suppliers in other countries.

Tariffs are bad for the exporter then, OK.

Other so-called "non-tariff barriers", like extra veterinary and customs checks at the border, could also increase costs to farmers.

Non-tariff barriers are also bad, OK.

"It could wipe out the sheep industry in Northern Ireland," farmers Jo and Lindsay Best, from County Antrim, told the BBC's Victoria Derbyshire programme. "A large percentage of our sheep are exported into France and the Republic of Ireland, and the price of feed could go up as well. It could decimate both the sheep and cattle industry here."

Why would the price of feed go up? Not clear.

Farms already receive more than £3.5bn a year in EU subsidies under the Common Agricultural Policy (CAP).

We own land! Give us money!

Under a no-deal Brexit, dairy exports would attract higher tariffs and other restrictions which, it is feared, could lead to an oversupply of milk in the UK and falling prices. At the same time, tariffs on imports from outside the EU could be cut substantially, meaning British farmers would face competition from low-cost butter and cheese made overseas.

So tariffs are bad, but low or zero tariffs are just as bad. Make up your minds.

Colin Ferguson, who runs his own herd of 200 dairy cattle on the Machars peninsula in south-west Scotland, said that would be his "biggest concern". "[Produce from overseas] doesn't need to meet the high welfare or production standards that we conform to, therefore our market gets undermined by cheap produce and the consumer quite rightly will buy the cheapest item on the shelf," he added.

So, non-tariff barriers are good?

The research by Andersons shows the impact of a no-deal Brexit will not be felt equally across the industry. Lamb and beef farming are likely to be hardest hit, especially in Wales and Northern Ireland.

Other businesses - like fruit and vegetables, pigs and poultry - could see modest increases in profitability as rivals like Danish bacon attract import tariffs and become more expensive.

So tariffs are good?

Here's a thought, everything will adjust. UK farmers will probably export less, but UK consumers will import less, so it balances out. The UK is only about two-thirds self-sufficient in food, so we can easily consume the entire UK farming industry's output. So lower "food miles" as well, which is surely A Good Thing? And maybe those sheep or dairy farmers can move into fruit and vegetables, pigs and poultry?

Killer Arguments Against LVT, Not (467)

The Daily Express rehashed the garden tax nonsense three days ago, we've done that.

The facts, as reported, are as follows:

"In June, the Labour Party leader unveiled recommendations to introduce a “progressive property tax” - which could see council tax replaced by one based on current house prices."

Which seems pretty uncontroversial to me, it's not far off a modest Land Value Tax.

The Conservative Party calculated the average home would pay £374 a year more than they currently pay in council tax each year.

They are shit at maths. If it replaces Council Tax, by definition, the average bill won't change. The median bill will drop significantly; bills on more expensive homes will go up.

They include this lengthy quote:

Matthew Lesh, head of research at the Adam Smith Institute think tank, told Express.co.uk:

“Labour has completely misunderstood the nature of the housing crisis. Their proposals are nothing more than an attack on private ownership and development of land, of families having a stake in society and an asset that they can call their own.

“It would result in fewer people having the opportunity to own their own home, not so-called ‘Land for the Many’. Labour’s plans would wreak havoc on the housing market. Time and again we’ve seen when the state tries to control a market it leads to shortage and lower quality — but Corbyn has never learned.

“Young people want to own their own home, not rent from the state the rest of their lives. Rent controls too would cripple the market, which has failed everywhere in the world it has been tried.

So far, so blah, what's his suggestion..?

“There is merit in reforming the council tax system, that is based on outdated 1991 valuations, but this means creating a single, regularly updated land value tax that replaces council tax, business rates and stamp duty in a revenue neutral manner. This is sensible tax reform that sadly Labour is undermining by putting it in the terms of class warfare.

Splendid suggestion, much better than Labour's of course. Chuck in Inheritance Tax as well to show that it's not a jealousy surcharge, it's just a service charge. The more taxes you roll into LVT, the better IMHO.

But why did the Daily Express include this part of the quote? If Labour proposed exactly that, they'd promptly dismiss it as a "garden tax" and we're back to Square One. Quite clearly, average annual bills would be higher than Council Tax bills alone, because it would include an element of SDLT and IHT, although the tax on the median home would be about the same as Council Tax.

The rest of the article is the usual garbage of no interest to the intelligent reader. Attack on wealth, negative equity, Poor Widows, landlords passing on the tax etc.

Probably true

From The Daily Mail:

Parenthood makes people happier - but only after their offspring have moved out.

That's according to research from Germany's Heidelberg University which examined data from a recent European survey.

It asked 55,000 people about their emotional well-being and found happiness is more common among those aged 50 or above who have independent children.

Specifically, they were less likely to be depressed and have more financial stability than their childless peers.

In two years, I will be able to confirm to confirm the veracity of this or otherwise.

Last time I posted something along these lines, A K Haart commented that the joy is short lived - after a few years, your children dump their children on you.

Common sense tells us that effect of gravity moves at the speed of light

This appears to be an open question; it wasn't until 2002 that they were fairly sure and very recently (2017) that they established that, "assuming a delay of zero to ten seconds, the difference between the speeds of gravitational and electromagnetic waves, vGW − vEM, is constrained to between −3×10−15 and +7×10−16 times the speed of light."

I would have thought it was easier to apply common sense.

The light we see from the sun arrives from where the sun was 8 minutes 20 seconds ago (assuming for simplicity the earth is stationary and the sun moves round it).

If you measure the direction in which the earth is being pulled by the sun, you'd establish that it is being pulled towards where the sun was 8 minutes 20 seconds ago.

The light meter and gravity meter will be pointing in exactly the same direction; if not, there'd be all sorts of apparent weird wobbles (which would make measuring distances and so on a lot easier, as it happens).

And well done to these chaps, while we're on the topic. Instead of chasing non-existent Dark Matter, they are actually measuring and observing exciting stuff that actually happens.