House prices to rise 50% in next 10 years, London to double...

[Triggaaar]

Far better to charge CGT on the gain when someone sells with the difference in buy price and sell price minus mortgage payments and the costs of house improvements deducted from the 'profit' figure.

So if someone buys a property for £250k, does nothing to it, and property prices double (say over 20 years) and they decide to move somewhere else, to a similar property - they sell for £500k, they buy for £500k, they pay costs of moving, legal fees, estate agent fees, they also pay £12.5k stamp duty. So it's cost them a fair bit to move to an equivalent house.

But you now want them to pay some Capital Gains Tax too, when they haven't actually gained anything?

 

[A mex eyecan]

So if someone buys a property for £250k, does nothing to it, and property prices double (say over 20 years) and they decide to move somewhere else, to a similar property - they sell for £500k, they buy for £500k, they pay costs of moving, legal fees, estate agent fees, they also pay £12.5k stamp duty. So it's cost them a fair bit to move to an equivalent house.

But you now want them to pay some Capital Gains Tax too, when they haven't actually gained anything?

and if you then factored in cost of interest on their previous mortgages as well ……

 

[BrightonCottager]

I largely agree, but we need millions more private homes too. Not least to give the huge overall contribution from S106, CIL and land at cost for the social housing. No UK government would ever have the vast sums required to build millions of council houses. I see in my work the true development costs ... even excluding land and developers profits, building homes in 2024 in the UK is incredibly expensive, we've a belt n braces approach with a raft of standards, concerns, rights, planning battle costs.

What kind of assumptions are made about landowner and developer profits though? The last and this government were assuming a developer profit of 15-20% was reasonable, but I read a blog by a Barrett's big cheese that indicated that a tenfold uplift for landowners would probably not be enough. The reason why the planning system is used to get sites and funding for ' affordable ' housing and infrastructure is that previous attempts have failed to tax that uplift in land value when planning permission is granted. The greed of landowners is another reason why house prices are so high.

 

[South Stand Bonfire]

The big developers have 'land banks' capable of accommodating about half a million homes, but they prefer to drip-feed developments into the market over time to limit supply and keep prices at a premium. It's in their interest to build homes but definitely not in their interest to create a glut.

The large scale builders do it in a managed way though. The large builders in London have several sites on the go at any one time but they are constrained by finance. Dare I say it, but the large sites in London are heavily marketed to the far east markets for investment purposes. Walk around Chelsea Harbour in the evening and see how many lights are actually on in those apartments.

 

[BrightonCottager]

The large scale builders do it in a managed way though. The large builders in London have several sites on the go at any one time but they are constrained by finance. Dare I say it, but the large sites in London are heavily marketed to the far east markets for investment purposes. Walk around Chelsea Harbour in the evening and see how many lights are actually on in those apartments.

I was told by someone working in a marketing suite at one of these big sites being developed by St William (the gasworks division of Barretts - same developer who are trying to develop Black Rock gaswork site in Brighton) that they were almost exclusively marketing to China and the Far East at higher prices than most locals could afford - they were effectively being used by Chinese people to transfer capital out of their country and probably only occupied for a couple of weeks a year.

And someone else told me they'd seen marketing for the new Marina flats in a middle east airport. So even if the planners do allocate enough housing land for assessed local needs, there is no guarantee that the homes once built will actually be available to meet that need.

 

[The Antikythera Mechanism]

I was told by someone working in a marketing suite at one of these big sites being developed by St William (the gasworks division of Barretts - same developer who are trying to develop Black Rock gaswork site in Brighton) that they were almost exclusively marketing to China and the Far East at higher prices than most locals could afford - they were effectively being used by Chinese people to transfer capital out of their country and probably only occupied for a couple of weeks a year.

And someone else told me they'd seen marketing for the new Marina flats in a middle east airport. So even if the planners do allocate enough housing land for assessed local needs, there is no guarantee that the homes once built will actually be available to meet that need.

The Battersea Power Station Development Company is funded by the Malaysian Government through Malaysian Property Companies. The total cost circa £9 Billion. No wonder some apartments are selling for north of £11 million each.

 

[South Stand Bonfire]

I was told by someone working in a marketing suite at one of these big sites being developed by St William (the gasworks division of Barretts - same developer who are trying to develop Black Rock gaswork site in Brighton) that they were almost exclusively marketing to China and the Far East at higher prices than most locals could afford - they were effectively being used by Chinese people to transfer capital out of their country and probably only occupied for a couple of weeks a year.

And someone else told me they'd seen marketing for the new Marina flats in a middle east airport. So even if the planners do allocate enough housing land for assessed local needs, there is no guarantee that the homes once built will actually be available to meet that need.

It’s standard practice to build a physical model and use the Hong Kong offices of the major estate agents (sorry, real estate consultants) to market the large sites in the far east. I wouldn’t know if they pay more than locals, but it is standard marketing practice, particularly as the Chinese domestic property development market has nose dived after a major developer there went belly up.

 

[BrightonCottager]

The local plans (I await @BrightonCottager arguing with me ) often took many more years to complete than the deadline and failed to deal with the numbers shortfall during that long extra delay ... compared to other planning authorities. I know this for a fact with BHCC, a planning expert demonstrated this to me.

Then our population has risen by 11m since 1997 and nimbies hate this, people want to live in southern England e.g. by family.

The local plans that emerged from 2015 onwards in total fail to deal with the huge population gains etc.

I won't argue the point that there were delays, but they weren't helped by constant Tory cuts (on average, planning departments lost 40% of their staff) and the replacement of regional planning - that imposed a housing number - with the farcical Duty To Cooperate where councils are expected to agree to take each other's housing demands. In the Sussex coastal strip, this puts pressure on councils like Wealden, Mid Sussex and Horsham to soak up some of the pent-up demand from B&H and Crawley. Never popular with local politicians, people and usually inadequate infrastructure in place.

 

[Weststander]

I was told by someone working in a marketing suite at one of these big sites being developed by St William (the gasworks division of Barretts - same developer who are trying to develop Black Rock gaswork site in Brighton) that they were almost exclusively marketing to China and the Far East at higher prices than most locals could afford - they were effectively being used by Chinese people to transfer capital out of their country and probably only occupied for a couple of weeks a year.

And someone else told me they'd seen marketing for the new Marina flats in a middle east airport. So even if the planners do allocate enough housing land for assessed local needs, there is no guarantee that the homes once built will actually be available to meet that need.

We knew HK parents of future Roedean pupils who bought new Brighton Marina apartments off-plan, then used them for just 6 flying visits a year for drop off/collection. Lying completely empty 9 months of the year. Doubling up as long term investments.

 

[clapham_gull]

The Battersea Power Station Development Company is funded by the Malaysian Government through Malaysian Property Companies. The total cost circa £9 Billion. No wonder some apartments are selling for north of £11 million each.

And what a monstrosity that is.

Really odd development full of high end shops. If you shop in those kind of shops you don't go there.

 

[GrizzlingGammon]

Taking todays headline of c 5% annual increase in house prices, paying say a tax of 10% of that increase (not the whole house value) to help solve the housing crises for those not fortunate enough to be born in the right decades, have parents that were or are amongst the very highest earners, doesn’t seem unfair.
I don’t know how the mechanisms would work but it’s not impossible. Though non payment issues is not an argument against or no taxes would be collectable..
I agree we have to fix the planning system but cash is exactly what’s needed to enable the state to build new council houses

Is this for those who own their home 100% outright, or should this also be paid on top of mortgage repayments. What happens if the price goes down? Does money go the other way back to home owners?

 

[dsr-burnley]

Taking todays headline of c 5% annual increase in house prices, paying say a tax of 10% of that increase (not the whole house value) to help solve the housing crises for those not fortunate enough to be born in the right decades, have parents that were or are amongst the very highest earners, doesn’t seem unfair.
I don’t know how the mechanisms would work but it’s not impossible. Though non payment issues is not an argument against or no taxes would be collectable..
I agree we have to fix the planning system but cash is exactly what’s needed to enable the state to build new council houses

I presume you're not proposing that someone (presumably the homeowner) should pay for a proper revaluation every year. And I also presume you're not allowing people to let the garden run to seed to reduce the taxes, so it couldn't be on a house-by-house basis.

Instead it would be based on council tax banding? Work out a very rough estimate of house pricing over the whole council, and then add it to council tax? 50%, 100% uplift? Would you vote for that?

The point about CGT not being charged on main residence, is that everyone has to have one. In theory someone has become £200k richer without doing anything for it, but it's not £200k they can spend. If you try taking a few years off work and spending that £200k instead of your salary, you find yourself without a home.

 

[jcdenton08]

@ManOfSussex Te… te… tell you what, tell you what…

 

[dazzer6666]

We knew HK parents of future Roedean pupils who bought new Brighton Marina apartments off-plan, then used them for just 6 flying visits a year for drop off/collection. Lying completely empty 9 months of the year. Doubling up as long term investments.

I had several colleagues in HK that had significant property portfolios in the UK.... didn't even bother to rent them out much of the time, simply a 'store of value' away from China. They always bought flats for their kids when they sent them to the UK to study too.

 

[Herr Tubthumper]

If there is not enough supply, then you need to either increase the supply or reduce the demand.

Economics for Dummies ?

 

[abc]

Economics for Dummies ?

Not really, because as I suggested earlier the s and d situation is so broken, only direct market intervention will bring the availability and price of rental property to a sustainable level.
I threw out an idea in my OP that is clearly, by the reaction on here, a non starter. But the idea that (the absolute necessity) of building houses is going to correct the market significantly in the next 10 to 20 years is unfortunately fantasy.

So what should the gov do that is considered fair and electable (which means, bluntly, those who have homes will agree to for the benefit of those that don’t)?

 

[Herr Tubthumper]

Not really, because as I suggested earlier the s and d situation is so broken, only direct market intervention will bring the availability and price of rental property to a sustainable level.
I threw out an idea in my OP that is clearly, by the reaction on here, a non starter. But the idea that (the absolute necessity) of building houses is going to correct the market significantly in the next 10 to 20 years is unfortunately fantasy.

So what should the gov do that is considered fair and electable (which means, bluntly, those who have homes will agree to for the benefit of those that don’t)?

I wasn’t questioning you or others, more I was mocking Mr Burnley’s mansplaining.

 

[dazzer6666]

Not really, because as I suggested earlier the s and d situation is so broken, only direct market intervention will bring the availability and price of rental property to a sustainable level.
I threw out an idea in my OP that is clearly, by the reaction on here, a non starter. But the idea that (the absolute necessity) of building houses is going to correct the market significantly in the next 10 to 20 years is unfortunately fantasy.

So what should the gov do that is considered fair and electable (which means, bluntly, those who have homes will agree to for the benefit of those that don’t)?

Build more houses - particularly on brownfield sites - with a larger % available as social housing
Hammer the BTL and ‘second home’ market with more taxes - top rate of income tax on rental income and further stamp duty on purchases for example - and cap the rental (perhaps linked to local council tax bands) so costs can’t be passed on by landlords ?

 

[Machiavelli]

Build more houses - particularly on brownfield sites - with a larger % available as social housing
Hammer the BTL and ‘second home’ market with more taxes - top rate of income tax on rental income and further stamp duty on purchases for example - and cap the rental (perhaps linked to local council tax bands) so costs can’t be passed on by landlords ?

^This seems the most obvious range of options.
Others include a land value tax, probably replacing council tax. If a LVT isn't viable or generates deleterious repercussions, then council tax remains ripe for reform -- and might produce some of the effects that @abc is seeking.

 

[mikeyjh]

Rent control, as seen in other parts of Europe, and far more aggressive taxation on rental income would be a good start in helping to stop this madness.

Yeah, but given the outcry from wealthy vested interests and Tory newspapers after last week's budget hikes on Inheritance and Capital Gains Taxes, we can imagine the apoplectic fury if government tried to place limits on rents (or the number of properties that any individual can own), or raised taxes on rental income.

We'd all drown under the crocodile tears of landlords moaning about how the people who would suffer the most would be their tenants and other renters.

Personally, I think that every time a greedy, parasite, buy-to-let landlord sells-up (moaning that they've been driven-out by a vindictive government), that is another property that a young couple or family have the chance to buy themselves, and escape from a lifetime of renting.

I've made no secret of the fact that I'm a 'greedy, parasite, landlord' and (because I'm not a greedy parasite) fully support more regulation around the rental market including some form of rent control, absolutely for tenants in place. Trying to have landlords sell up though does nothing to help our housing crisis though, it simply shifts (slightly) the imbalance of supply and demand from but buying to renting. Such is the demand for renting that in some of the areas I have houses rent prices have risen by about 80% over the last 6 years, far far outstripping the buying market. Some people need to rent, some people want to rent so should they be penalised by your proposed legislation?