House prices rose 7.3% this year, average now almost £250k

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touch said:
It would have negligible impact on most people with mortgages. Average house price in England is £256,000 which gives an annual property tax of £1228. Some people would end up paying more, some less depending on how the current council tax bands fall on your property. The real impact might be that house prices don't rise as fast but that's not going to manifest itself in monthly outgoings and force people to sell up.
The people who end up paying more would be people with very expensive properties or portfolios of multiple properties.
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Average where I live is 400k, but I wouldn't describe people as wealthy or able to shoulder higher taxes. People are scrapping by here.
 
HACO said:
The "general increases inline with everything else in the country" has been 10 times higher than inflation rate, i.e. an investment.

‍I'm with you, housing shouldn't be an investment. But it is. Because you buy it and it appreciates, that's an investment. So like any investment, if it's allowed to go up in value, it should be allowed to fall in value. Expecting government to bail out investments when they don't work out is privatising the gains and socialising the losses.
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'Has been' is the key part here. I just don't see house pricing outstripping inflation by the rate that it has done in the past. Take a look at the graphs for average UK house pricing for the last 20 years, (ignoring the last 6 months or so, as th SDLT holiday has skewed the results) you can see since about 2017 that the level is starting to plateau.

Price hikes only really benefit those who are looking to downsize. We've bought a reasonably sized house, should be a good size to start a family but i can see that we'll eventually outgrow it and want to upsize to a bigger house. Price hikes move the goalposts and are likely to make upsizing unaffordable for most people.
 
neocon said:
Average where I live is 400k, but I wouldn't describe people as wealthy or able to shoulder higher taxes. People are scrapping by here.
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So the property tax would be £160 per month on average where you are. It can't be that much higher than your council tax was - maybe £30 at most? If that sort of increase in monthly costs forces you to sell up and move somewhere cheaper then you probably couldn't really afford to live there in the first place.
 
touch said:
So the property tax would be £160 per month on average where you are. It can't be that much higher than your council tax was - maybe £30 at most? If that sort of increase in monthly costs forces you to sell up and move somewhere cheaper then you probably couldn't really afford to live there in the first place.
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Sounds the same as what it is now.

What's the rate for £1,000,000 property?
 
Scam said:
Those problems already exist at the bottom of the ladder. I'd argue there are more young families struggling to buy anything bigger than a 2 bed flat at the moment, then there would be of people that would get caught in negative equity, plus can't afford the mortgage, plus need to move etc. It's a very narrow set of requirements you're putting forward.
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No it isn't. Negative equity would only meaningfully occur if it was systemic and a impacted a lot of people so swathes of the market would be stuck, not only those wanting to sell but the limited options of those wanting to buy PLUS a massive hit on the confidence of banks to lend who you're absolutely right always win and would just shut up shop.

Then the lack of housing activity has ripples through the economy such as reduced spending on home improvement/moving services etc etc.

Remember I'm the guy here who is suggesting the most desirable situation is stagnation tending to slow decline. I'm not saying reductions are a bad thing, I'm saying negative equity would normally mean a drop of 10%+ or more because by definition it means it's worth less than you owe and 10% has been the minimum deposit in reality for some time now.

That's a pretty traumatic economic impact that has repercussions way beyond house prices which you can't isolate or shrug off.
 
neocon said:
News flash: millennials shocked to find that property in London is expensive
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It's not just London, Cornwall and other places are just as bad in terms of wages vs house prices.

The "solution" most often prescribed by the better off here is that there should be a mass exodus from London and Cornwall and we should all move to Slough.

Because London and Cornwall will be absolutely fine if the only people living and working there are bankers. Don't need carers, cleaners, delivery people, shop assistants or any of the like in those places.

So yeah everyone who can't afford to live in London or Cornwall should just leave. Let's get this mass exodus show on the road!
 
Slough is expensive to live in compared to Cornwall - it's well connected to London, the airport and all the companies in the Thames Valley. I know someone who sold up in Slough a few years ago to move to Cornwall because of this (although to be fair it was Redruth which is apparently a dump?).
 
Em3bbs said:
Slough is expensive to live in compared to Cornwall - it's well connected to London, the airport and all the companies in the Thames Valley. I know someone who sold up in Slough a few years ago to move to Cornwall because of this (although to be fair it was Redruth which is apparently a dump?).
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370-390k depending on the source for the average in Slough
 
neocon said:
370-390k depending on the source for the average in Slough
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Yep, and the average in Redruth seems to be about 40% of that in Sluff:

https://www.rightmove.co.uk/house-prices/slough.html
"The majority of sales in Slough during the last year were terraced properties, selling for an average price of £343,209. Semi-detached properties sold for an average of £427,016"

https://www.rightmove.co.uk/house-prices/redruth.html
"The majority of sales in Redruth during the last year were terraced properties, selling for an average price of £136,203. Semi-detached properties sold for an average of £202,925"

My friend who sold up was mortgage free, so basically ended up with a massive lump sum when he moved to Cornwall.
 
Em3bbs said:
Slough is expensive to live in compared to Cornwall - it's well connected to London, the airport and all the companies in the Thames Valley. I know someone who sold up in Slough a few years ago to move to Cornwall because of this (although to be fair it was Redruth which is apparently a dump?).
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You have to look at it in terms of average price vs average wage, not just average price.

By that metric Cornwall has some of the most expensive places to live in the country.

Lots of low earners down here. Lots of seasonal workers. Lots of people living hand to mouth.

£130,000 represents a king's ransom to a lot of people down here. That's why it's so attractive for London-based landlords to buy houses down here and then rent them out. Compared to London prices they're cheap. And rents don't seem at all connected to earnings down here, so much so that 75% of your wages can (and is) be spent on rent. Leaving people with ~£100 a week for food, bills, clothes and everything else.

Also I've never been to Slough :p Not even sure where it is, but it appears to be the butt of many jokes :p Apologies to anybody from Slough if it's not as bad as I've been lead to believe :p

Em3bbs said:
(although to be fair it was Redruth which is apparently a dump?).
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Thank you for your kind words! Redruth *aspires* to be a dump :p
 
I'm not sure how this property tax thing would work in reality, and what other impacts it might have.

I bought my house for £340000, but then spent some money improving it.

If the house is now worth more due to my expenditure and improvements, do I now pay more property tax to boot, or would it only be recalculated on sale?

Even at £340000 I am worse off, as I also get single occupancy on council tax today. I pay £108 a month which is £1296 a year. £340000 * 0.0048 = £1632 a year on the property tax rates.
 
touch said:
So the property tax would be £160 per month on average where you are. It can't be that much higher than your council tax was - maybe £30 at most? If that sort of increase in monthly costs forces you to sell up and move somewhere cheaper then you probably couldn't really afford to live there in the first place.
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Yes please! That's just over half what I pay now! £160 would be a bargain
 
HungryHippos said:
I'm not sure how this property tax thing would work in reality, and what other impacts it might have.

I bought my house for £340000, but then spent some money improving it.

If the house is now worth more due to my expenditure and improvements, do I now pay more property tax to boot, or would it only be recalculated on sale?

Even at £340000 I am worse off, as I also get single occupancy on council tax today. I pay £108 a month which is £1296 a year. £340000 * 0.0048 = £1632 a year on the property tax rates.
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Surely it would need recalculating every year. Where I live people have bought houses for 100k and 10-15 years later they are 500k. It wouldn't be fair otherwise, you could have people on the same street paying very different rates.
 
neocon said:
Surely it would need recalculating every year. Where I live people have bought houses for 100k and 10-15 years later they are 500k. It wouldn't be fair otherwise, you could have people on the same street paying very different rates.
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Most countries that have property taxes based on value just get a value per square feet in the neighbourhood and apply it to every property. Which is totally doable every year, ONS does that already here.
 
HungryHippos said:
I'm not sure how this property tax thing would work in reality, and what other impacts it might have.

I bought my house for £340000, but then spent some money improving it.

If the house is now worth more due to my expenditure and improvements, do I now pay more property tax to boot, or would it only be recalculated on sale?

Even at £340000 I am worse off, as I also get single occupancy on council tax today. I pay £108 a month which is £1296 a year. £340000 * 0.0048 = £1632 a year on the property tax rates.
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They'll just go by average price per square feet in the neighbourhood like all other countries who have similar policies. Buying a new kitchen or bathroom won't change your tax, expanding might.
 
touch said:
So the property tax would be £160 per month on average where you are. It can't be that much higher than your council tax was - maybe £30 at most? If that sort of increase in monthly costs forces you to sell up and move somewhere cheaper then you probably couldn't really afford to live there in the first place.
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So why would it have an effect on house prices then ?
 
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