# Capping House Price Inflation



## flanajb (14 Sep 2013)

Made me chuckle listening to this proposal last night on the news. Me thinks the horse has already bolted on that one!

What was even funnier was that they asked an Estate Agent whether he thought capping house prices was a good idea. It's like asking an alcoholic whether increasing duty on alcohol should be in the budget!


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## Jacob (14 Sep 2013)

Yep. Madness all round. Another huge bubble.
The simplest cap would be higher death duties - plus some very extensive tax reforms to stop avoidance and evasion. Tax the dead - spend the money on public housing.
Followed by taxes on empty properties - even the bedroom tax is a good ides except they are hitting exactly the wrong target.


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## flanajb (14 Sep 2013)

I also forgot to mention. On one side they are talking about capping house prices and then you have George Osborne's crazy 'Help To Buy' scheme being rolled out to all in January next year. The Government being a guarantor with tax payers money to someone buying a house with potentially just a 5% deposit. That is just going to fuel the housing market when it comes into play.


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## wizard (14 Sep 2013)

they should ban second homes


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## Lons (14 Sep 2013)

Oh God
Not another soapbox subject! 
Should be banned along with politics, religion and of course...sharpening :wink: 

Bob


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## Phil Pascoe (14 Sep 2013)

flanajb":3fdd501o said:


> I also forgot to mention. On one side they are talking about capping house prices and then you have George Osborne's crazy 'Help To Buy' scheme being rolled out to all in January next year. The Government being a guarantor with tax payers money to someone buying a house with potentially just a 5% deposit. That is just going to fuel the housing market when it comes into play.



:lol: Yes, a bit of idiocy there. Unfortunately it suits any government to have a rising house market, when it would be better for the country (not for individuals, though) if house prices halved.


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## RogerS (14 Sep 2013)

Jacob":1h02zmhb said:


> .... even the bedroom tax is a good ides except they are hitting exactly the wrong target.




How so? If you're living in three bed council house and there is just you........there are loads of families who need social housing so why should a single person live (free) in a three bed house?


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## RogerS (14 Sep 2013)

wizard":1fudxpas said:


> they should ban second homes




Define 'second home'. When we were both working I lived in a flat in London which is where my work was located and my wife was living in the family home...near where she was working. Is that a 'second home' ? Just assuming that they banned second homes (whatever they might be) just how would that be regulated?

I'd ban holiday let houses.....the local Judge has ripped the heart out of our village by buying up several properties as Holiday Lets.


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## flanajb (14 Sep 2013)

Lons":5wb170mg said:


> Oh God
> Not another soapbox subject!
> Should be banned along with politics, religion and of course...sharpening :wink:
> 
> Bob


Come on Bob you know you want to contribute to the discussion. Thoughts?


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## MIGNAL (14 Sep 2013)

Yes it's odd that fast rising house prices are deemed to be a good thing by many people. Of course the same people would be absolutely furious if the price of Cars, Underwear, Axminsters tool prices, The Daily Mail/Express and a loaf of bread rose by 10% year on year! House prices (or rents, same thing) are simply another 'cost' to the working person. Double that cost and folk want higher pay increases. You can hardly blame them.


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## Jacob (14 Sep 2013)

RogerS":go7uy94a said:


> Jacob":go7uy94a said:
> 
> 
> > .... even the bedroom tax is a good ides except they are hitting exactly the wrong target.
> ...


if there is a housing problem by all means encourage people to downsize, but the bedroom tax is hitting people who didn't choose their homes in the first place (they are allocated), don't have much choice about where to go next (suitable housing not necessarily available), haven't much money (by definition), may not be able to afford to move even if there was somewhere to go, may not benefit by being dislodged from their community, may have special needs. 
Hit the better off, e.g. second home owners first. Only fair, sensible and could be effective.


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## Jacob (14 Sep 2013)

RogerS":2ind04zy said:


> ....
> 
> I'd ban holiday let houses.....the local Judge has ripped the heart out of our village by buying up several properties as Holiday Lets.


Agree. Parts of the country are seriously blighted by the empty home phenomenon. Worst in picturesque areas where much more than half of all housing is empty except as holiday lets.


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## Lons (14 Sep 2013)

flanajb":13g5jeh0 said:


> Come on Bob you know you want to contribute to the discussion. Thoughts?



Leaving in 10 mins from my large det house in my comfortable Audi to for a round of golf at my local club so I guess you know where I might stand :wink: 

Might contribute later if the thread doesn't degenerate into meaningless heated opinions (as it usually does on this subject).

I don't agree with a boom and bust policy on house prices or on indescriminate lending BTW but the large majority of house owners have acted responsibly and borrowed within their means as well as sacrificing the booze, cigs and many luxuries that others may not have done in order to buy a comfortable home. Why drag everyone down to another level?

cheers
Bob


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## Jacob (14 Sep 2013)

Lons":1q36eu64 said:


> ..... Why drag everyone down to another level?
> 
> cheers
> Bob


The housing problem isn't about those who don't find it a problem.


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## Hardwood66 (14 Sep 2013)

We have been having alsorts of problems with ate move, we have lost one house 2 buyers and now were waiting for the planning one the new house! I know say why people say moving is stressful


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## doorframe (14 Sep 2013)

So Bob, did you get soaked?


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## finneyb (14 Sep 2013)

BoE Governor says interest stay low until unemployment reduces to 7%
This is looking to be sooner that he expected 
If interest rates go up, I'm in clover- my rightful place , but those with a mortgage are really going to feel it - the rise from 4% to 6% interest is a 50% increase in payments. If that happens you won't need a cap.

Having said that I can remember 16% mortgage interest rates -went from 8% in the June of 1973 to 16% by December - we didn't have two months with the same payment - we moved into the house in the June.

Brian


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## Lons (14 Sep 2013)

doorframe":3gm537rp said:


> So Bob, did you get soaked?



Nope. Absolutely beautiful sunny day, excellent for golf, pity my game was cr*p #-o Didn't even get "soaked" at the 19th, just a pint shandy as a responsible driver  



> If interest rates go up, I'm in clover- my rightful place , but those with a mortgage are really going to feel it - the rise from 4% to 6% interest is a 50% increase in payments. If that happens you won't need a cap.
> 
> Having said that I can remember 16% mortgage interest rates -went from 8% in the June of 1973 to 16% by December - we didn't have two months with the same payment - we moved into the house in the June.



Relatively few "normal" houseowners really gain from the ups and downs of the housing market as after all it has to be primarily a home and if you sell you need to buy unless getting out of the market or gaining some of your investment back by downsizing. Only those with money to speculate can make real gains but such is the case in any area of investment. I also came through the crippling interest rates era and I very much doubt our difficulty raising a deposit at the time was much easier than current. We were prepared to give up more to save it than many of todays would be buyers who wouldn't dream opf sacrificing their mobile phones, nights out etc.

I grew up in a council house along with my 4 brothers and 4 sisters. My father was a miner and we were always very hard up. I'm proud of my roots, my parents raised us to have honest, moral attitudes and a healthy respect for hard graft and the value of money but I did decide at a young age that I would never rent.
Grammar school, uni and bloody hard work opened doors and gave me enough wherewithal to buy but it was hard especially when interest rates rocketed even though I never fully stretched our mortgage and never borrowed against equity. We had few holidays until I bought a s/h touring caravan which I was allowed to pull with my company car, whilst some of my family in local authority housing had holidays abroad, latest electrical gizmos, quality motors and got drunk every Friday and Saturday, saved not a penny *and had no worries over house repair bills*, even though they earned less than me. Anyone who doubts this needs to take a drive around some of these estates.
Now, self employed, mortgage paid off years ago and a decent equity in my home, why should I or people like me be penalised for being prudent? I am after all still paying inflated contributions in council tax which is levied on the perceived value (size / location) of my property rather than the number of occupants.

They need to vastly increase the number of affordable new build houses and make it less attractice to those speculating private landlords who build up housing portfolios to rent out at inflated rates.
Stop all extra mortgage borrowing unless buying or significantly upgrading a home, i.e. no more hols and cars "on the mortgage".
Social housing should be for those who absolutely need it and not a "house for life" which is often the case even when the house size is no longer appropriate.

Inflated prices are caused largely by supply and demand. Increase supply and the market finds a sustainable level.
Bob

ps - flanajb.. you forced me into a rant :lol:


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## finneyb (14 Sep 2013)

Lons":2ox0qcj4 said:


> Stop all extra mortgage borrowing unless buying or significantly upgrading a home, i.e. no more hols and cars "on the mortgage".



AH BUT - it's that borrowing that drives the economy and politicians get elected easier with a rising economy. So that ain't going to change. The end result of course is that we end up disappearing up our fundamental orifice - much like 2008. 

Brian


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## Lons (15 Sep 2013)

finneyb":3ptec5an said:


> Lons":3ptec5an said:
> 
> 
> > Stop all extra mortgage borrowing unless buying or significantly upgrading a home, i.e. no more hols and cars "on the mortgage".
> ...



Agreed but adding to the mortgage was seen as cheap money and borrowing against the gains or potential gains of property value. Let people borrow if they want or need to but by normal methods subject to the usual checks and regulations. the object being to force people to borrow only if within their means.

AND... stop these bl**dy payday loans companies fleecing those who can least afford it. (One of the bu*ggers sponsor my footy team :evil: )

Bob


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## flanajb (15 Sep 2013)

Lons":7efc5toa said:


> ps - flanajb.. you forced me into a rant :lol:


 :lol:


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## mind_the_goat (16 Sep 2013)

Banning holiday lets could reduce tourist income in areas heavily dependent on it, thus reducing jobs. You may have more housing for locals but more chance of them being unemployed.
I do agree that some control over the number of lets in some areas would be a good thing, but god knows how you'd make it fair.


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## RogerS (16 Sep 2013)

mind_the_goat":2cy8q0mr said:


> Banning holiday lets could reduce tourist income in areas heavily dependent on it, thus reducing jobs. You may have more housing for locals but more chance of them being unemployed.
> ......



I can understand that argument for a seaside resort as there are a significant number of holiday lets and it is in effect an 'industry' and so does bring in employment etc cafes, restaurants, shops etc. But there are many places such as round me where the holiday letters bring in diddly squat in terms of opportunity for jobs etc


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## Modernist (16 Sep 2013)

Surely I am not alone in being a bit cynical that having heard the current gov blaming all our troubles on the previous property bubble, they now propose it as a way out of our current troubles.

The answer, of course, lies in generating wealth and employment through industry combined with more control over a finance industry which is, by definition, without morality.


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## bugbear (16 Sep 2013)

Lons":1h86t26x said:


> Only those with money to speculate can make real gains but such is the case in any area of investment.



Ah - not so. You've forgotten the "clever" eighties trick, discussed at dinner parties up and down the land.

Buy a house with a 95% mortgage, keep it for 3-4 years, and sell at a 30% (or better) gain.

You only need enough capital to stand the 5% deposit and 3-4 years of mortgage payment.

*As long as the capital rise is enough*, you're in serious clover.

It's called leverage, and it's considered "sophisticated financial engineering".

BugBear


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## MIGNAL (16 Sep 2013)

finneyb":ecroqy4g said:


> BoE Governor says* interest stay low until unemployment reduces to 7%*
> This is looking to be sooner that he expected
> If interest rates go up, I'm in clover- my rightful place , but those with a mortgage are really going to feel it - the rise from 4% to 6% interest is a 50% increase in payments. If that happens you won't need a cap.
> 
> ...



That means that interest rates will NEVER go up. Someone should inform him of the last time that the (genuine) unemployment rate was as low as 7% !!! Probably sometime in the '60's. Yes, that's nigh on 45 years ago. I doubt it will happen anytime soon.


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## finneyb (16 Sep 2013)

BoE Governor hasn't used the word 'genuine' before unemployment  He has given himself a wide circle of error and could use any unemployment measure if it suits when the time comes. 

Brian


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## MIGNAL (16 Sep 2013)

Of course! That's the only way it's ever going to get to 7% - a bit of a fiddle here, a bit of a fiddle there. 30 separate attempts to fudge the figures and suddenly it's 7%!! Just have to get creative.


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## RogerS (21 Sep 2013)

finneyb":3bs4iy7g said:


> Lons":3bs4iy7g said:
> 
> 
> > Stop all extra mortgage borrowing unless buying or significantly upgrading a home, i.e. no more hols and cars "on the mortgage".
> ...



Apart from the fact that this time round, a significant percentage of house purchases are with cash. Around 35% compared to 10-12% the last time any 'bubble' happened. That is a significant increase.


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## Losos (21 Sep 2013)

Lons":25ln708m said:


> Inflated prices are caused largely by supply and demand. *Increase supply* and the market finds a sustainable level.



Hi Bob, read your post with interest as it mirrors much of my life. I'm glad that all you rhard work and financial prudence are now paying off.

I also agree that like most commodities supply and demand sets the price people are willing to pay. 

But I now firmly believe that rather more houses, what we need is *less new build houses*. It seems to me that every tiny square foot of land is being built on whenever possible. Yes we have green belt and all that stuff but it is still the case that there are *too many people *on this tiny island and everyone can *not* have a home unless you concrete over every bit of grass and chop down every bit of woodland. If people lived with parents for longer and those parents taught them the value of saving and planning for the future (As yours did) then some of the problem would be solved.


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## Jacob (21 Sep 2013)

When people say "too many people on this tiny island" etc. I always suggest that they should do the decent thing and jump in a pond or something. But it always turns out that they don't see themselves as surplus - it's always somebody else! Surprise surprise!

The real issue is not too many people but rather too little constructive government/management to provide for the needs of all. And the answers are simple too - build more is one. Another would be to occupy underused housing - 2nd homes, holiday lets etc. Perhaps by the incentive of a massive increase in bedroom tax extended to the whole population but means tested to avoid punishing the poor as the amazingly stupid current system does. Perhaps make the tax take equal to the cost of building the public housing still needed. That'd be simple and fair.
We've got the tax principle in place , why not use it? There is more surplus wealth around nowadays than there ever was - for starters we could tax this lot very easily - I bet all their bedrooms aren't in use!


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## RogerS (21 Sep 2013)

I'm afraid Losos that, while I agree with you that we have too many people in this country chasing the available resources especially things like NHS, it is a myth that we'd need to concrete over the country. Less than 7% is 'urban' and even that has 50% of green space. Urban includes rural building and roads... http://www.bbc.co.uk/news/uk-18623096


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## Jacob (21 Sep 2013)

RogerS":1his6vik said:


> I'm afraid Losos that, while I agree with you that we have too many people in this country chasing the available resources especially things like NHS, ....


I take it you won't be chasing NHS services yourself. That's very noble of you.


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## RogerS (21 Sep 2013)

Jacob":2wcrsbuw said:


> ..... to avoid punishing the poor as the amazingly stupid current system does......



Where is your evidence to support this...other than in Jacob-land?


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## RogerS (21 Sep 2013)

Jacob":3ryg4f6e said:


> RogerS":3ryg4f6e said:
> 
> 
> > I'm afraid Losos that, while I agree with you that we have too many people in this country chasing the available resources especially things like NHS, ....
> ...



Pillock


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## Jacob (21 Sep 2013)

RogerS":20rtfgvx said:


> Jacob":20rtfgvx said:
> 
> 
> > ..... to avoid punishing the poor as the amazingly stupid current system does......
> ...


It's in all the paper and the news everywhere, not just the Guardian. It's even been reported back to the UN as a breach of human rights. You should keep up with the news Roger!


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## RogerS (21 Sep 2013)

Jacob":akovuqcs said:


> RogerS":akovuqcs said:
> 
> 
> > Jacob":akovuqcs said:
> ...



Same old...same old. I make the mistake of taking you off Ignore only to discover that you are still up to your old tricks. Throw out some bleedin' heart Liberal bullsh*t and then when challenged to justify it with evidence come up with a load of waffle such as your reply above.

Two things, Jacob.

1) Life's a puppy so get used to it

2) You're back on Ignore


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## Jacob (21 Sep 2013)

RogerS":2ryca7vq said:


> ......
> 2) You're back on Ignore


Dear oh dear, I'm so upset! :lol:


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## Phil Pascoe (21 Sep 2013)

Jacob, How on earth can it be against someone's human rights not to give them something? You've never given me anything so I suppose I should report you. The communist Brazilian half wit should try sorting out the millions living in her own slums.


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## Jacob (21 Sep 2013)

It's not that simple. Maybe you need to get up to speed on reading the news. Perhaps talk to Roger, he seems out of touch too.


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## RogerS (21 Sep 2013)

phil.p":sonn7p6d said:


> Jacob, How on earth can it be against someone's human rights not to give them something? You've never given me anything so I suppose I should report you. The communist Brazilian half wit should try sorting out the millions living in her own slums.



Phil..keep your sanity....don't engage the troll.


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## Lons (21 Sep 2013)

Jacob":gq3robi5 said:


> When people say "too many people on this tiny island" etc. I always suggest that they should do the decent thing and jump in a pond or something. But it always turns out that they don't see themselves as surplus - it's always somebody else! Surprise surprise!
> 
> The real issue is not too many people but rather too little constructive government/management to provide for the needs of all. And the answers are simple too - build more is one. Another would be to occupy underused housing - 2nd homes, holiday lets etc. Perhaps by the incentive of a massive increase in bedroom tax extended to the whole population but means tested to avoid punishing the poor as the amazingly stupid current system does. Perhaps make the tax take equal to the cost of building the public housing still needed. That'd be simple and fair.
> We've got the tax principle in place , why not use it? There is more surplus wealth around nowadays than there ever was - for starters we could tax this lot very easily - I bet all their bedrooms aren't in use!



There you go.... I knew if we waited long enough, Jacob would come up with a perfect solution, ( doesn't he always :lol: ) (hammer) 

It's easy then -

* Allow anyone and everyone without exception, to come and live on this little island which it seems may not be overpopulated after all. :wink: 
* Tax everyone who had the audacity not to smoke, drink or gamble, save hard then decide to spend their money on a larger house and now have a spare bedroom or three. Despite the fact that most of us already contribute more than average to local authority housing by way of higher council tax charges. Not everyone borrowed on a mortgage which was more than they could afford!

What about going the whole hog and forcing anyone with a spare bedroom to take in an immigrant or better still, the whole family?
Why don't we demolish all existing houses, outlaw anything less than 20 stories high and build huge blocks of flats then force all of us to live in 1 bedroom apartments (no garden or workshops allowed)? Oh - that's been done before in certain communist countries has it not?
There would of course be no entrepreneurs, no incentive to build a business, employ others or take financial risk, unless you happen to deal drugs perhaps.

perhaps if you're so concerned with "being fair" Jacob, you could give away your tools and machinery and allow a family from afar to live in your workshop and as you're so damning of the government and profess to know better, you should go into politics :wink: 

The current "bedroom tax" will be unfair to some but there is a need to at least do something to allocate local authority housing more appropriately. As an example, my parents lived in the same 4 bedroom council house for more than 40 years however after the kids had gone they had 9 years just on their own and then 6 with just mum after my dad died. 15 years in a house that would have accommodated a family - crazy!!!

Bob


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## Jacob (22 Sep 2013)

There are also well off people with much more property under used. Should they be exempt from the pressure to downsize? Do you think your parents are second class citizens who should be forced to move on every time their circumstances change? 
In an case it wouldn't be easy for the less well off - house prices and rents go ever upwards.
It would be a good thing if people could move more easily - but that is the whole problem; they can't.


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## Phil Pascoe (22 Sep 2013)

Well off people have bought their spare capacity - they are welcome to do as they wish with it. Why should they pay for someone else's? Your argument starts with the basic surmise that a large percentage of the population has a god given right to have their property paid for, not only by someone else, but for the whole of their lives. I we all lived in your socialist utopia, where would the money come from? the tooth fairy?


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## Jacob (22 Sep 2013)

phil.p":1lrauhzn said:


> ..... Your argument starts with the basic surmise that a large percentage of the population has a god given right to have their property paid for, ....


No it doesn't.
I suppose my basic surmise is that we are all responsible for all our mutual well being and quality of life. 
It's called "civilisation". Quite a recent project - only 6 or 7 thousand years old (nothing, in evolutionary terms) so it's no surprise that we have a lot of right-wing throwbacks who seem only recently to have arrived here from their caves and jungles. :lol: :lol:


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## Lons (22 Sep 2013)

phil.p":1kyw8vju said:


> Well off people have bought their spare capacity - they are welcome to do as they wish with it. Why should they pay for someone else's? Your argument starts with the basic surmise that a large percentage of the population has a god given right to have their property paid for, not only by someone else, but for the whole of their lives. I we all lived in your socialist utopia, where would the money come from? the tooth fairy?



+1



> There are also well off people with much more property under used. Should they be exempt from the pressure to downsize? Do you think your parents are second class citizens who should be forced to move on every time their circumstances change?
> In an case it wouldn't be easy for the less well off - house prices and rents go ever upwards.
> It would be a good thing if people could move more easily - but that is the whole problem; they can't.



There is a huge difference between people who have spent their money (no matter where they got it unless by illegal means) on property and those who live in local authority housing for whatever reason.
The later was supposed to be for those who can't afford to buy their own, or rent privately and as such is subsidised by all of us who pay taxes. No problem with that, after all that's where my roots are however, the size of the accommodation should be relevant to their needs which several spare bedrooms are not. Private owners have the choice to downsize and must pay the associated costs of selling, buying and legal costs as well as all the additional tax that applies to those fees. Or.. they can elect to stay and pay the higher costs of running a larger home. Council tennant rents are subsidised.

And for your information, my parents, both now dead were very certainly not 2nd class citizens and neither is anyone else who fall on hard times or are struggling to survive but you live in cloud cuckooland if you believe that everyone should be brought down to the same level.

I repeat: if your beliefs are so strong, put your money where your mouth is and give up your workshop, tools, car etc. to those many "unfortunates" who don't have such things or choose to spend their money elsewhere.

Perhaps everyone should be limited to 4 chisels, 1 plane, 1 drill and 1 tape measure :lol: Why should one guy be allowed to buy say a festool domino when I don't have one? I really must consider donating my Audi to some poor deserving soul - who wants it? :wink: :lol: 

Bob


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## RogerS (22 Sep 2013)

Lons":3b8m4sbp said:


> .......
> I repeat: if your beliefs are so strong, put your money where your mouth is and give up your workshop, tools, car etc. to those many "unfortunates" who don't have such things or choose to spend their money elsewhere.
> 
> Perhaps everyone should be limited to 4 chisels, 1 plane, 1 drill and 1 tape measure :lol: Why should one guy be allowed to buy say a festool domino when I don't have one? I really must consider donating my Audi to some poor deserving soul - who wants it? :wink: :lol:
> ...



Spot on! Jacob won't agree, naturally. Well, how can he when he has this above his workbench :lol:


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## Phil Pascoe (22 Sep 2013)

The one and only thing not thought out was that there are not enough single bedroom places - councils should have been given a couple of years to rectify that. All social (I hate that word) housing should be let short term at commercial rates, then the tenants could explain to social security why they expect a larger house than they need. Jacob, my wife and I are responsible for our children's and no one else's wellbeing - I am not responsible for other people, any more than other people are responsible for me and mine.


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## Jacob (22 Sep 2013)

phil.p":3oi6b5yi said:


> T.....I am not responsible for other people, any more than other people are responsible for me and mine.


Yes you are and yes we are. 
I doubt there is anyone in Britain who lives without giving to or taking anything from society - could be some isolated nutter living in a forest somewhere*, but I doubt it.

PS * RogerS? :lol: :lol:


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## Lons (22 Sep 2013)

Jacob":3vql3d9q said:


> could be some isolated nutter living in a forest somewhere*, but I doubt it.



Wrong again! :lol: :lol:
.


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## Jacob (23 Sep 2013)

Thought for the day:
"Homelessness is caused not by too many people crowding a too small country, but by too few people owning too much land."


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## Phil Pascoe (23 Sep 2013)

No, it's not.


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## Jacob (23 Sep 2013)

And it's even worse in Scotland
PS A bit old that link. Not that anything has changed much.


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## Phil Pascoe (23 Sep 2013)

The first link doesn't work. Why do think allowing tenant farmers to buy their farms would have any influence on homeless figures? A great non sequitur.


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## Jacob (23 Sep 2013)

phil.p":3arh8ssh said:


> The first link doesn't work. Why do think allowing tenant farmers to buy their farms would have any influence on homeless figures? A great non sequitur.


The big picture of land ownership is closely paralleled by buildings ownership, throughout Britain.


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## Phil Pascoe (23 Sep 2013)

Thought for the day - the benefits bill since 2000 has reached £14,000,000,000,000.


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