Are you a victim[1] of a new-build leasehold? A digression

Just look at the howls of self-pity coming from house-buyers on discovering that their property is leasehold!

TWO GOOD ARTICLES IN TODAY’S PAPERS (SAT 27 JAN, 2018)

TWO GOOD ARTICLES IN TODAY’S PAPERS (SAT 27 JAN, 2018)

  Anne Pettifor, always a good read, explains as I have done, that

“Building more homes won’t solve the housing crisis”

https://www.theguardian.com/commentisfree/2018/jan/27/building-homes-britain-housing-crisis

And over in Ireland comes the explanation that too many people actually like rising house prices. There is a coalition of the greedy and the desperate who would be horrified if prices were to crash.

https://www.irishtimes.com/opinion/david-mcwilliams-rising-house-prices-suit-too-many-people-1.3368455 

EXCESSIVE HOUSE PRICES—HOW THEY LET IT HAPPEN

[of course it’s the price of LAND that is boosting the price, so in this extract I’ve added LAND to housing]

Here are four ways the State reinforces the hyper-commodification of housing LAND to make the price of housing so expensive.

—First, the state deregulates mortgage lending, ends rent control, and privatizes public housing LAND in the U.S. and U.K.

—Second, the state allows financialization of housing LAND by the banks pooling mortgages and selling them as “liquid assets.”

—Third, the state allows globalization of housing LAND with foreign investors speculating in U.S. housing or buying luxury housing as an investment which were never meant to be lived in.

—Fourth, the state allows gentrification to increase landlords’ profits with huge rent increases.

https://www.counterpunch.org/2018/01/19/the-myths-of-housing-policy/

In a review of David Madden and Peter Marcuse’s thought-provoking book In Defense of Housing asks us to rethink the U.S. housing crisis.

THE FIX: GIVE EVERYONE £40 P.A. TO HELP PAY THE NEW LAND VALUE TAX

THE FIX: GIVE EVERYONE £40 P.A. TO HELP PAY THE NEW LAND VALUE TAX

What’s wrong with abolishing Stamp Duty completely in one fell swoop, and replacing it with a simple mini-LVT based on the value of the plot your house stands on?

HOW MUCH WILL I PAY? THE COST OF THE MINI-LVT TO HOME-OWNERS

So the bargain is this: Next time you buy a house, you won’t pay Stamp Duty. Instead there will be a much smaller annual charge based on the value of the plot. 

A rate of one-third of one percent (0.3%) of the Land Value would do the trick. This would keep the same amount of tax revenue for the Chancellor, eventually, after a few years.  

Well, not quite, but this is a dynamic tax geared to rising land prices. And don’t forget the good part of this switch—getting rid of Stamp Duty on house purchases, probably the worst tax there is, certainly one of the most hated.

But what about its replacement? Here’s what mini-LVT looks like for average-priced houses in different parts of England:

Area	Average £price of house	Implied LV	Proposed annual LVT at 0.3%	Old £SDLT (1-off)
Cluster*	150,000	30,000	£90	500
East Anglia	220,000	100,000	£300	1,900
South West	230,000	110,000	£330	2,300
South East	350,000	230,000	£690	7,500
London	500,000	380,000	£1,140	15,000

*‘cluster’ means everywhere outside London and the Home Counties

 “land value tax faces large political obstacles”

So says a new publication from Civitas, an independent UK think-tank. This statement of the bleedin’ obvious comes at the end of very good chapter extolling the virtues of LVT. So what’s their answer to overcoming political obstacles?

Hand over development rights to Local Authorities:—

“remove from landowners their ability to withhold land in pursuit of more favourable circumstances and a higher sale price at some point in the future. This could be achieved by enabling the public sector to purchase land that is designated for new housing at close to its existing use value” 

 Pure funk! If we can’t do the right thing then let’s try some cack-handed largely untried Scheme instead!

IT'S TRUE. BUILDING MORE HOUSES WON'T BRING DOWN PRICES ANYTIME SOON.

So says Oxford Economics, ‘Forecasting UK house prices and home ownership’, November 2016

Here's what they say: