Just how stupid do the Tories think we are?

PS. You really don't seem to understand what I'm talking about. If people have spare cash, all they're doing is playing real-life Monopoly if they buy property. Investing in a business which creates something redistributes wealth amongst a wider range of people and contributes to improvement in living standards.

PS. Have you ever thought of retail consumers as needy because they buy things from shops? Who do you think profits from the transactions?

Norah

growstuff

Norah

Out of interest, what is a better personal investment (for savings)?

If you're looking at it from a macro-economic viewpoint, investment in businesses, which employ people, would be a better investment. Apparently, business investment in the UK is at an all time low.

Look to all the people employed in housing maintenance. People who do plumbing, electrical, painting, window washers, gardeners. Then think of the accountants, solicitors, letting agents. Well run rentals have a plethora of people in businesses employed. Rentals are a business and can be run well.

I would agree with you about well-run rentals, but many rentals aren't well-run.

I don't accept your argument about the employment of plumbers, electricians, etc. If the work needs doing, it doesn't matter who owns the home - landlords or owner occupiers.

In any case, rentals always end up with a transfer of wealth from those who have least to those who have most, which isn't healthy for society.

Norah I'm sure that there are more landlords who do the maintenance themselves rather than employ the various trades that you mention.

growstuff

Norah

Out of interest, what is a better personal investment (for savings)?

If you're looking at it from a macro-economic viewpoint, investment in businesses, which employ people, would be a better investment. Apparently, business investment in the UK is at an all time low.

Look to all the people employed in housing maintenance. People who do plumbing, electrical, painting, window washers, gardeners. Then think of the accountants, solicitors, letting agents. Well run rentals have a plethora of people in businesses employed. Rentals are a business and can be run well.

Katie59

The problem is that social housing is being /has been sold and not replaced and the system is out of balance. I would like to think a labour government would change it but Blair didn’t.

Look to Wales Katie59. Both direct council housing and social housing schemes are being prioritised and funded here, under our Labour Government. It’s not easy to finance because it’s counter to the UK government’s policy, but it’s already happening regardless.

The problem is that social housing is being /has been sold and not replaced and the system is out of balance. I would like to think a labour government would change it but Blair didn’t.

Casdon

It makes little sense to me, particularly in the current market. If you privately rent and receive housing support payment which is paid by the government (average private rental cost is example, say, now £800 compared with social rent of, say £500), the government is paying more every week towards your rental - to a private landlord. Social housing is ultimately more cost effective to the government as well as, of course, to the tenant.
See the figures below.

www.nimblefins.co.uk/business-insurance/landlord-insurance-uk/average-rent-uk

I couldn't agree more. It's madness at every level.

MerylStreep

Casdon

It makes little sense to me, particularly in the current market. If you privately rent and receive housing support payment which is paid by the government (average private rental cost is example, say, now £800 compared with social rent of, say £500), the government is paying more every week towards your rental - to a private landlord. Social housing is ultimately more cost effective to the government as well as, of course, to the tenant.
See the figures below.

www.nimblefins.co.uk/business-insurance/landlord-insurance-uk/average-rent-uk

How true. A friend, now retired, was the maintenance manager for one of the largest private landlords in my town.
I know the eye watering amounts of money some of these landlords are earning.

As I've mentioned previously, my former husband is landlord with quite a substantial portfolio. Obviously, I am no longer privy to the details of his finances, but I do hear snippets from my children and I see the lifestyle he leads. He's a qualified graduate surveyor, but realised 20 years ago that he can make more money and do very little work from being a landlord.

Norah

Out of interest, what is a better personal investment (for savings)?

If you're looking at it from a macro-economic viewpoint, investment in businesses, which employ people, would be a better investment. Apparently, business investment in the UK is at an all time low.

Norah

growstuff

Not rational if one holds certain values and cares about every person in a society, rather than looking after "number 1".

A basic need such as housing in an allegedly developed country should not be left to the whims of markets.

By the way, much of the money currently invested in property has not been saved by the property owners. More often, it is inherited money and people are looking for an easy place to invest it.

Interesting. It seems to me that investing in rentals is helping the people who need helping - those who can't or won't save to purchase (whatever reason), provide decent rental accommodations.

People invest and save their extra money in many ways, rentals rentals or better, raw land, being one way. I suspect we won't agree.

No, we won't agree. Nobody is helping anybody by pushing up property prices, which is what rentals do. I wouldn't mind so much if everything were confiscated when people die, so that everybody starts their life on a level playing field.

I'm a tenant and resent being thought of as somebody who needs helping. I've paid my landlord about £100,000 in rent over the last 10 years. I actually think he's the one who needs his pension boost.

The country as a whole would be better off, if so much investment money weren't diverted into property, which benefits one person, but invested in businesses, which would benefit more people and the economy as a whole.

Casdon

It makes little sense to me, particularly in the current market. If you privately rent and receive housing support payment which is paid by the government (average private rental cost is example, say, now £800 compared with social rent of, say £500), the government is paying more every week towards your rental - to a private landlord. Social housing is ultimately more cost effective to the government as well as, of course, to the tenant.
See the figures below.

www.nimblefins.co.uk/business-insurance/landlord-insurance-uk/average-rent-uk

How true. A friend, now retired, was the maintenance manager for one of the largest private landlords in my town.
I know the eye watering amounts of money some of these landlords are earning.

Out of interest, what is a better personal investment (for savings)?

It makes little sense to me, particularly in the current market. If you privately rent and receive housing support payment which is paid by the government (average private rental cost is example, say, now £800 compared with social rent of, say £500), the government is paying more every week towards your rental - to a private landlord. Social housing is ultimately more cost effective to the government as well as, of course, to the tenant.
See the figures below.

www.nimblefins.co.uk/business-insurance/landlord-insurance-uk/average-rent-uk

growstuff

Not rational if one holds certain values and cares about every person in a society, rather than looking after "number 1".

A basic need such as housing in an allegedly developed country should not be left to the whims of markets.

By the way, much of the money currently invested in property has not been saved by the property owners. More often, it is inherited money and people are looking for an easy place to invest it.

Interesting. It seems to me that investing in rentals is helping the people who need helping - those who can't or won't save to purchase (whatever reason), provide decent rental accommodations.

People invest and save their extra money in many ways, rentals rentals or better, raw land, being one way. I suspect we won't agree.

Not rational if one holds certain values and cares about every person in a society, rather than looking after "number 1".

A basic need such as housing in an allegedly developed country should not be left to the whims of markets.

By the way, much of the money currently invested in property has not been saved by the property owners. More often, it is inherited money and people are looking for an easy place to invest it.

Katie59 "Providing what? He or she is making money out of the people who rent and treating them as a commodity. Try comparing the work involved with property rentals with doing a 40 hour week!”

That’s the price we pay for inadequate social housing. The reason Housing Associations can offer lower rents is because they don’t pay Stamp Duty or Income Tax or CGT

Of course. People save, presumably from taxed earnings, invest in property, pay the assorted taxes involved, provide housing and earn an ok ROI. Rational I'd think.

growstuff

MaizieD

I'm not so sure about the "extracting more taxes" argument because if people have spare money (or can borrow cheaply to make profit), they would invest in something else, which would probably be taxed.

That's the bit I disagree with, growstuff.

An increased tax take might be a consequence of increased privatisation of rented property, but I really can't see it as being deliberate.

The very essence of Thatcherism was shrinking the state and leaving as much as possible to the markets. I cannot see a possible increase in tax take as being part of that.

Particularly when her neoliberal ideology also embraced cutting taxes.

I was trying to say that I don't really see it as a deliberate objective either.

I worded my reply badly. I was agreeing with you 😆

Katie59

Katie59

MaizieD

The NHS state funding produces its own return of taxation.

I am asking why you think that a state which is cutting its spending would require a larger tax take? There's no logic to it.

To reduce borrowing, the UK has been increasing borrowing/creation every year because taxation does not match spending.
The annual deficit has risen from 0% to 100% of GDP in the last 20 yrs, Sunak is trying to contain borrowing, Starmer will do much the same but likely increase taxation to improve services.

Typo that should read 10% of GDP

That is because, if you reduce public spending you reduce your tax base

'Borrowing' increased massively once the tories inaugurated austerity, which involved swingeing cuts to public services. Which meant loss of jobs and loss of business for suppliers to the public sector. Not only loss of business for direct suppliers but also for the suppliers of goods and services to the wage earners who lost their public sector jobs.

There was also a corresponding increase in benefit payments to be funded.

Impoverishing a significant number of working age people meant that businesses were reluctant to invest (just as they are now) in an economy where their potential customers had little money to spare.

A further hit to the tax base was the rise of low paid 'gig economy' jobs.

MaizieD

^I'm not so sure about the "extracting more taxes" argument because if people have spare money (or can borrow cheaply to make profit), they would invest in something else, which would probably be taxed.^

That's the bit I disagree with, growstuff.

An increased tax take might be a consequence of increased privatisation of rented property, but I really can't see it as being deliberate.

The very essence of Thatcherism was shrinking the state and leaving as much as possible to the markets. I cannot see a possible increase in tax take as being part of that.

Particularly when her neoliberal ideology also embraced cutting taxes.

I was trying to say that I don't really see it as a deliberate objective either.

vegansrock

A lot of London properties are owned by shell companies, usually based somewhere like BVI, so that foreign investors can hide money. Lovely homes lie empty as they increase in value for their investors or money launderers . One sheikh has a £5bn property portfolio in London, most of these homes aren’t lived in. Surely this scandal should be tackled?

Here's 2 examples of the same house on Bishops Avenue in Hampstead. One from 9 years ago and the other more recent. It's shocking how owners can let this house (and there are others) become derelict.

www.theguardian.com/society/2014/jan/31/inside-london-billionaires-row-derelict-mansions-hampstead

www.dailymail.co.uk/news/article-11644725/Inside-crumbling-remains-dilapidated-25m-mega-mansion-Londons-Billionaires-Row.html

Katie59

MaizieD

The NHS state funding produces its own return of taxation.

I am asking why you think that a state which is cutting its spending would require a larger tax take? There's no logic to it.

To reduce borrowing, the UK has been increasing borrowing/creation every year because taxation does not match spending.
The annual deficit has risen from 0% to 100% of GDP in the last 20 yrs, Sunak is trying to contain borrowing, Starmer will do much the same but likely increase taxation to improve services.

Typo that should read 10% of GDP

MaizieD

The NHS state funding produces its own return of taxation.

I am asking why you think that a state which is cutting its spending would require a larger tax take? There's no logic to it.

To reduce borrowing, the UK has been increasing borrowing/creation every year because taxation does not match spending.
The annual deficit has risen from 0% to 100% of GDP in the last 20 yrs, Sunak is trying to contain borrowing, Starmer will do much the same but likely increase taxation to improve services.

The NHS state funding produces its own return of taxation.

I am asking why you think that a state which is cutting its spending would require a larger tax take? There's no logic to it.

Why would the state want more tax if it isn't going to spend on providing anything?

Sorry Maisie I was under the impression that the NHS for example was funded at least partly by taxation

You can’t tax state enterprise, you can tax private enterprise,

Oh, come on, KAtie59, the only bit of state enterprise that isn't taxed is the provider.

Why would the state want more tax if it isn't going to spend on providing anything?