The stich up keepiing homes unaffordable

antrobus

ILW wrote: »

I would assume you are paying a tax on it already.

I am indeed. That would be one of the costs of holding land. (At least when it's got a building on it.) I imagine lots of people own bits of land here and there, and that there is a cost of doing so. I'd guess they bear the costs because they're happy that the benefit they derive from holding the land exceeds the cost.

Prothet_of_Doom

CLAPTON wrote: »

If the big boys don't build why exactly do the small fellows stop? How are they remaining competitive by not building and making no money?
How is making no money a good thing for either big boys and small companies?

Shareholders are concerned with dividends and share price. No building means no dividends (as has been the cases for the last few years) and a collapse in share price .

If you don't build you don't sell your asset, which means once it's value comes back on line you've still got that asset and can build on it.

Share price will depend on value of assets held, return on capital, return (profit) on sales, return (profit) on cost.

If you reduce your costs to zero, and sell nothing, you make no profit, so you can't pay any dividend, but you still have the asset, which has potential for the future. So shareholders less unhappy than if you'd blindly given away the land asset cheap, and made a smallish profit.

ILW

antrobus wrote: »

I am indeed. That would be one of the costs of holding land. (At least when it's got a building on it.) I imagine lots of people own bits of land here and there, and that there is a cost of doing so. I'd guess they bear the costs because they're happy that the benefit they derive from holding the land exceeds the cost.

Th point was that putting a tax on development land that was failing to be developed, would help get things moving. Currently you only pay a tax on the land once you have put a house on it. This could be a disinsentive to build.

ILW

Prothet_of_Doom wrote: »

If you don't build you don't sell your asset, which means once it's value comes back on line you've still got that asset and can build on it.

Share price will depend on value of assets held, return on capital, return (profit) on sales, return (profit) on cost.

If you reduce your costs to zero, and sell nothing, you make no profit, so you can't pay any dividend, but you still have the asset, which has potential for the future. So shareholders less unhappy than if you'd blindly given away the land asset cheap, and made a smallish profit.

So best to just hang onto the land to stop your competition getting their hands on it if cash flow is a bit tight. Doesn't help get houses built.

CLAPTON

ILW wrote: »

Th point was that putting a tax on development land that was failing to be developed, would help get things moving. Currently you only pay a tax on the land once you have put a house on it. This could be a disinsentive to build.

whilst I am in favour of land value taxes, I'm confused by your logic


why would a tax on land with a house be a disinsentive to build?

The tax would be paid by the new owner of the property and not the builder?

In any event we already have such a tax it's called council tax and i've never heard anyone saying that such a tax is a disinsentive to build.

ILW

CLAPTON wrote: »

whilst I am in favour of land value taxes, I'm confused by your logic


why would a tax on land with a house be a disinsentive to build?

The tax would be paid by the new owner of the property and not the builder?

In any event we already have such a tax it's called council tax and i've never heard anyone saying that such a tax is a disinsentive to build.

Sorry, my wording was a bit confused. What I meant to say was that not taxing land until it is built on could be a disinsentive to build.

Loughton_Monkey

Graham_Devon wrote: »

Then we are doomed and theres absolutely nothing that can be done. Ever. Market is what it is.....

....Unless they want taxpayer guarantees, then we can find solutions to everything.

Well that's probably not too far from the truth... about being 'doomed'.

Sticking to the LGA part of the issue [to which you are referring] we are talking about a 381,000 backlog of available plots simply waiting to build so-called 'affordable' housing with taxpayer money. If £100K a pop, then that's a mere £38 billion - a drop in the ocean of the £1.2 trillion waiting to be paid off....!!!

Except that I suspect a clear majority of the UK taxpayers are getting sick and tired of the whole concept of paying more and more money to subsidise housing. If you offer to put a 'poor' family in a brand spanking new 3-bed and cough up the whole cost through subsidies and housing benefit, they are not going to refuse are they? In fact on the back of that, another two are going to join the queue.

Don't get me wrong. In any society there will always be a small percentage who deserve help/charity [call it what you want] from the taxpayer. But it's a question of scale - and even without a penny more on housing subsidies - we have surely reached, and surpassed, the figure most people would think is 'reasonable'.

... and before you ask, I don't agree much with HTB cost being borne by taxpayers either.

Given where we are now, I want a government with the guts to rein in spending and concentrate on generating wealth-creating enterprise which creates wealth and opportunities to all.

When anybody reaches 18 or so, they should be making assumptions about if/when they plan to flee the nest and want their own 'roof'. Is it too stupid to say something like "... well if that's what you want, then pay for it like anyone else...".

CLAPTON

Prothet_of_Doom wrote: »

If you don't build you don't sell your asset, which means once it's value comes back on line you've still got that asset and can build on it.

Share price will depend on value of assets held, return on capital, return (profit) on sales, return (profit) on cost.

If you reduce your costs to zero, and sell nothing, you make no profit, so you can't pay any dividend, but you still have the asset, which has potential for the future. So shareholders less unhappy than if you'd blindly given away the land asset cheap, and made a smallish profit.

If you sell nothing you make no profit and you have no cash flow.

As a real company will still have costs, the company will quickly become insolvent unless bailed out by the banks or shareholders.

Several of the building companies were indeed bailed out by the banks.

You are quite correct to say that holding a fire sale of your assets (the land bank) is often unwise as this will cripple you for the future.

The companies did in fact continue to build but at a lower pace and with lower profits due to lack of customers.

Graham_Devon

Loughton_Monkey wrote: »

When anybody reaches 18 or so, they should be making assumptions about if/when they plan to flee the nest and want their own 'roof'. Is it too stupid to say something like "... well if that's what you want, then pay for it like anyone else...".

No, it's not stupid to say that and I agree with it. It is afterall everything we have throughout most of the 1900's. Council houses allowed those with less income to get on and the wealthier bought "nicer" private homes. It worked.

However, we'd have to accept that the majority could not afford to pay the current prices.

So we'd also have to accept a fall in house values to a point where a sustainable number of new entrants could buy in order to keep the supply and demand in balance. It would be unfair to take away social housing but keep ramping up prices of private housing.

I would suggest that if we are going to state "if you want it, you pay for it" then equally we'd need to stop meddling and pumping the price up via guarantees and gimmicks. That includes housing benefits for all those bar the disabled.

You'd end up with a true market. And those who wanted it being able to actually buy it through a bit of graft. At the moment, it would be impossible for many if they worked literally all hours god sent.

At the moment all the taxpayer is doing it taking on all the [possible] losses and guaranteeing the profits while the goods become less and less affordable and as a result, the benefit bill becomes larger and larger.

chucky

Graham_Devon wrote: »

Ahhh, so it appears that once again, the media, the local government agency, they are all wrong.

This forum, and a handful of HPI entusiasts are right?

Not only right, but everyone else is totally deluded, moronic and stupid.

Sums up the forum at the moment really.

Mods please close this thread down, anyone who disagrees with the Professor of Devonian Economic theory is a HPI enthusiast.

You just can't make it up. Cringe.