Lack of housing is all our fault for not moving into rabbit hutches!

[brightncheerful]

We wanted to downsize, Mrs Bnc wanted to move to Dorset or the Isle of Wights. but couldn't find anything suitable (to our liking) in our price range. Actually, that's not quite true; in Dorset, we did find a nice modern three-storey house with 5 bedrooms for approximately £50K less than our estate agent reckoned ours would fetch. However, although I offered £5K more than the asking price, the seller's agent wouldn't recommend the seller accept because we hadn't got a buyer for our house.

It is understandable for new build developers to want buyers to have 'under offer' or actually sold so as to be ready to exchange contracts within a couple of weeks, but for the second-hand market to expect the same is unrealistic - and I've never done it their way, but only made an offer, had it accepted and then put my house on the market for sale. I offered above the asking price because, as I told the agent, I work from home and, for the logistics, I need certainty of what I want to buy. Our agent suggested I sell and move into a rented pending buying, but that's impractical and expensive. Ok, perhaps if your idea of WFH is a laptop on the kitchen table, but not if you've 7 4-drawer filing cabinets, an A3 high-speed printer/duplex copier/scanner, etc'; also a dog that's into chewing, also relandscaping the garden and collecting complaints to the council for barking occasionally during antisocial hours.

As for the cost of moving and buying, I reckoned £20,000 in costs and commission, and that's before having to spend on whatever to suit our taste.

[Lootman]

As for the cost of moving and buying, I reckoned £20,000 in costs and commission, and that's before having to spend on whatever to suit our taste.

Including stamp duty? I would have thought that a 5-bed house in Dorset would have to be over £500,000, so that is 5% on anything over £250,000, so at least £12,500 for that alone, no?

[Adamski]

Let's face it, older people have bigger houses with spare rooms. So they could downsize if they wanted to. They could house refugees. But people happy where they are. Unless a future govt forced people out, difficult see how could do this politically, things stay as they are.

[Lootman]

Let's face it, older people have bigger houses with spare rooms. So they could downsize if they wanted to. They could house refugees. But people happy where they are. Unless a future govt forced people out, difficult see how could do this politically, things stay as they are.

Not a good look for any government to force old people out of their homes.

But financial incentives might motivate some to downsize e.g. paying all relocation costs? Breaks on council tax for those who agree?

[UncleEbenezer]

Let's face it, older people have bigger houses with spare rooms. So they could downsize if they wanted to.

Of course, lots of older people do downsize when their children grow up - with the possible exception of the ultra-Entitled with their rationalisations. While others find uses for their extra space - like the family friends who turned their top floor into a separate flat and let it out.

They could house refugees. But people happy where they are. Unless a future govt forced people out, difficult see how could do this politically, things stay as they are.

Not a good look for any government to force old people out of their homes.

But financial incentives might motivate some to downsize e.g. paying all relocation costs? Breaks on council tax for those who agree?

Financial incentives should be there for everyone, without bribes.

Shift more of the burden of taxation away from penalising productive endeavour and onto ownership of scarce resources - like land and housing. The rich can still choose to have much more property than they need, but should pay proportionately for the privilege.

Not to mention, those with most to protect have most to gain from funding services like the police. At least if it's legally acquired and not the proceeds of crime ...

[Lootman]

Not a good look for any government to force old people out of their homes.

But financial incentives might motivate some to downsize e.g. paying all relocation costs? Breaks on council tax for those who agree?

Financial incentives should be there for everyone, without bribes.

Shift more of the burden of taxation away from penalising productive endeavour and onto ownership of scarce resources - like land and housing. The rich can still choose to have much more property than they need, but should pay proportionately for the privilege.

Not to mention, those with most to protect have most to gain from funding services like the police. At least if it's legally acquired and not the proceeds of crime ...

I still maintain that a carrot will be more effective than any attempt to use coercion.

And it would be unfair to suddenly start taxing homes a lot more, after people have bought them. So I prefer incentives to lubricate house moves, such as waiving stamp duty and council tax on the new home.

[CliffEdge]

Equality is, as always, the enemy of fairness.

[Clitheroekid]

the costs of selling/buying/doing up etc etc are so huge, they eat up most of any price differential.

Perhaps it would make a difference for some if there was no stamp duty on the house being bought?

My proposal to fix this would be when selling one house and buying another the stamp duty would be based on the difference in price, if the house you buy is cheaper you'd pay zero.

If would also make it easier to move house for work, if replacing one house for another of equal value there would be no tax to pay.

As for the cost of moving and buying, I reckoned £20,000 in costs and commission, and that's before having to spend on whatever to suit our taste.

I can never understand the importance that people place on the costs of moving house, or the wailing and gnashing of teeth that inevitably results from increasing stamp duty.

The financial equation of moving house simply takes these into account, so in practice it doesn’t make much difference whether the stamp duty is £5k or £50k, as the sale price of the property adjusts accordingly.

My experience in decades of converayncing was that the lunatic tinkering with stamp duty never made much actual difference. If someone was buying a house at £500k with £25k stamp duty and the government reduced it to £10k then the vendor wiould simply raise the price by £15k. As the buyer was already committed to spending £525k to acquire the house he’d cough up the extra, so all the government had achieved was a loss of revenue to finance a windfall for wealthy house owners.

It may have more effect on first time buyers, as they can’t borrow to cover stamp duty, but with older, wealthier people who often don’t have mortgages at all it’s really irrelevant.

And with regard to the main question about a shortage of housing might I suggest that it’s hardly surprising when there are 700,000 more people looking for somewhere to live than there were last year? Even if the government were to actually achieve even more ruination of our country with their target of 300,000 nasty new houses every year it still wouldn’t be enough. It’s not too few houses, it’s too many damn people!

[Lootman]

I can never understand the importance that people place on the costs of moving house, or the wailing and gnashing of teeth that inevitably results from increasing stamp duty.

The financial equation of moving house simply takes these into account, so in practice it doesn’t make much difference whether the stamp duty is £5k or £50k, as the sale price of the property adjusts accordingly.

My experience in decades of converayncing was that the lunatic tinkering with stamp duty never made much actual difference. If someone was buying a house at £500k with £25k stamp duty and the government reduced it to £10k then the vendor wiould simply raise the price by £15k. As the buyer was already committed to spending £525k to acquire the house he’d cough up the extra, so all the government had achieved was a loss of revenue to finance a windfall for wealthy house owners.

That is logical. But it is still the government sucking money from the private sector and adding frictional costs to mobility.

In the US there is no stamp duty. There is typically a local transfer tax paid by the seller, but it is a fraction of 1% and so not material.

And "conveyancing" is split between the estate agent and a title office, and costs little to the buyer and seller, which no doubt you would hate.

Then again, US estate agents charge between 4% and 6%!

[Mike4]

When our four kids flew the nest we sold our large rambling 1920s house in half an acre in a good bit of Reading.

Guess who bought it. Yep, a couple in their late 50s with no kids.

[UncleEbenezer]

In the US there is no stamp duty. There is typically a local transfer tax paid by the seller, but it is a fraction of 1% and so not material.

Sweeping generalisation of 50-odd regimes.

There's also my colleague (from an affordable part of the US) who some years back told me some numbers. $5k/year property tax, on a family home valued at $170k. A regime with higher property taxes and lower taxes on hard work than ours had avoided the house price bubble that affected certain US states, as well as of course Blighty.

[GoSeigen]

Over 65? Hang your head in shame, ring that bell and do the march of shame down your high street.

Then sell up and buy that penthouse in Tenerife!

Flippin' awesome idea. Please do all of the above.


Oh, y'all voted for UKIP and Brexit so the Tenerife bit is not going to be so easy is it?


GS

[stevensfo]

Over 65? Hang your head in shame, ring that bell and do the march of shame down your high street.

Then sell up and buy that penthouse in Tenerife!

Flippin' awesome idea. Please do all of the above.


Oh, y'all voted for UKIP and Brexit so the Tenerife bit is not going to be so easy is it?


GS

Not as easy, true, but it's not difficult to obtain a long-term visa. You need a minimum income level and health insurance:

As a non-EU citizen, there are certain residency requirements that you must meet before retiring to Tenerife.
The first step is to apply for a long-term visa or permit, allowing you to stay on the island for more than 90 days. This visa can be obtained from the Spanish embassy or consulate in your home country.
To be eligible for a long-term visa, you must have sufficient financial means to support yourself during your stay in Tenerife.
You must show proof of income, such as pension income, savings, or investments. Additionally, you will need to provide evidence of health insurance that covers you while living in Spain.
Once you arrive in Tenerife, you will need to apply for a residence permit. This requires a visit to the immigration office, where you must provide biometric data and additional documentation.

https://adamfayed.com/retiring-in-tener ... he-island/

If you're a non-EU/EEA citizen who wishes to retire in Spain, you'll need to prove you have enough income to support yourself without income from employment. As of 2021, the minimum figure for this is currently set at €2,259 per month or just over €27,000 per calendar year. How much money do you need to emigrate to Tenerife? Therefore, as an individual, you will need to have €2,400 as a regular guaranteed monthly income or a yearly income of €28,800.

https://lovethemaldives.com/wiki/can-i- ... n-tenerife

Steve

PS I was very anti-Brexit and would not vote for UKIP if they were the last party on earth.

[Tedx]

Spain has one of the higher income requirements, France and Portugal (in particular) have much lower amounts (Portugal's is less than the UK state pension)

Cyprus is also low. Italy is high.

[Lootman]

When our four kids flew the nest we sold our large rambling 1920s house in half an acre in a good bit of Reading.

Guess who bought it. Yep, a couple in their late 50s with no kids.

There is a trend of wanting large homes again. I know of a couple of large properties near me that were split up into flats in the 1960s and 1970s, that have been reconstituted into one large family home again. In one case to create a 7-bedroom house. They have 3 teenage kids though, to be fair.

In the US there is no stamp duty. There is typically a local transfer tax paid by the seller, but it is a fraction of 1% and so not material.

my colleague (from an affordable part of the US) who some years back told me some numbers. $5k/year property tax, on a family home valued at $170k. A regime with higher property taxes and lower taxes on hard work than ours had avoided the house price bubble that affected certain US states, as well as of course Blighty.

Again, each State is different. Some States have an annual property tax of about 3% of property value, which is high. Although bear in mind that education and public safety are funded locally in the US. Also note that only owners pay property tax there, not tenants.

And some States, notably California, have capped property taxes at something like 1.2% of value annually.

Also property taxes, like mortgage interest, are tax-deductible.

If you think the US does not have some extreme property price appreciation then there are some homes I could show you in the SF Bay Area that make London home prices look cheap. A better reason for moderate house price inflation in much of the US is simply the vast availability of land, and the fact that they can still build using lumber from the forests that they never chopped down like we did.

[Clitheroekid]

And some States, notably California, have capped property taxes at something like 1.2% of value annually.

I've a friend who lives in Mountain View, near San Francisco, but he tells me that he can't afford to move because of the way the property tax system works there.

He bought his house in the early 80s for about $80,000, and it's now worth over $2m. But his property taxes are fixed as a proportion of the purchase price of the house, so he's paying around $1,000.

If he moved, and bought an equivalent property, he'd be looking at an annual bill of around $24,000!

[Lootman]

And some States, notably California, have capped property taxes at something like 1.2% of value annually.

I've a friend who lives in Mountain View, near San Francisco, but he tells me that he can't afford to move because of the way the property tax system works there.

He bought his house in the early 80s for about $80,000, and it's now worth over $2m. But his property taxes are fixed as a proportion of the purchase price of the house, so he's paying around $1,000.

If he moved, and bought an equivalent property, he'd be looking at an annual bill of around $24,000!

That is correct. CA property taxes are 1.2% of your purchase price, with annual increases limited to 2%. So the longer you live there, the cheaper in relative terms your property tax is. This is a result of the state's Prop 13 election win in 1978.

Parcel taxes can be added but only if the voters approve it by 50% plus 1, or 2/3, depending on the wording of the ballot initiative. They often get voted down.

[brightncheerful]

As for the cost of moving and buying, I reckoned £20,000 in costs and commission, and that's before having to spend on whatever to suit our taste.

Including stamp duty? I would have thought that a 5-bed house in Dorset would have to be over £500,000, so that is 5% on anything over £250,000, so at least £12,500 for that alone, no?

Sturminster Newton

[Lanark]

My experience in decades of converayncing was that the lunatic tinkering with stamp duty never made much actual difference. If someone was buying a house at £500k with £25k stamp duty and the government reduced it to £10k then the vendor wiould simply raise the price by £15k. As the buyer was already committed to spending £525k to acquire the house he’d cough up the extra, so all the government had achieved was a loss of revenue to finance a windfall for wealthy house owners.

For a single transaction then I agree it makes no difference, and thats probably why it exists, a relatively pain-free form of taxation.

Where is does make a difference is if you want to move house multiple times, someone who moves 5 times in 10 years for work opportunities will pay 5 x £25k and that does start to add up.
Do we really want to encourage an immobile workforce?
I guess the argument will be that companies should pay for it in a relocation package, so then it effectively becomes taxation on the recruitment of senior roles.

[Mike4]

Do we really want to encourage an immobile workforce?

Curious isn't it?

Decades ago when I read the book "Janet and John Economics for Plumbers" (I think that was probably the title), I remember being totally convinced about the value of a mobile workforce to the economy and the need for a liquid rental market, which at the time we in the UK did not have.

Then we got one thanks for BTL mortgages but nobody nowadays seems to think freedom to rent a home is of the slightest importance to the economy, least of all those left of centre or politicians of any colour.