Lockdown’s Last Lingerings - (Covid since L2 ended)

[boxbrownie]

12 hours ago, vaughan45 said:

Agreed - the question I keep being asked is 'If your concerned about catching Covid-19 why do you keep have packages delivered?'

Use “clean package protocol” and tell her your keeping the economy from dropping even more through the floor, that’s what I do 

[Nearholmer]

1 hour ago, TheQ said:

Yes saying older people have profited from rising house prices is false,

 

I didn't say "profited". What I said was "reaped the benefits" and they (we) unquestionably have.

 

People who owned (i.e. without mortgage) all or part of the value of houses over the period since 2008 have seen the value of their capital rise hugely. Because older people tend to own more, sometime all, of the capital value of their homes, that affect has been hugely disproportionately in favour of older people.

 

Is it a real benefit? Yes. It can be used as collateral for loans to release cash, in very many cases it could, if desired, by used to release cash by down-sizing or moving to a cheaper area, and it can (and in many cases probably will one day) by used to release cash to fund a more comfortable care home than is available to those who don't have it in the twilight years, or give a "leg up" to the next generation in that family.

 

Not only has the disproportionate affect since 2008 transferred capital to older people, it has further cemented inequality that perpetuates through generations; to caricature, it made the rich richer, and the poor poorer.

 

For "the average Joe" it isn't a big affect, but when you look at parts of the country, notably, but not exclusively, The Home Counties, it has been a really significant affect - its part of what fuels the North-South divide (which isnt really N-S, but that does as a term).

[Andy Hayter]

The problem with a VAT increase is that what the chancellor needs to do is stimulate the economy and a VAT increase does exactly the opposite.

 

Taxing people/pensioners on the value of their house also has issues.  How do you establish the value?  It is only worth what someone will pay for it and until it is put up for sale it can be difficult to establish that worth.  Secondly there is an assumption that the home owner actually has access to cash to pay the tax.  While that may be true for many, there will be some (probably pensioners) where that will not apply and further it is likely that these people are likely to be the ones least able to secure a loan to pay the tax.

[APOLLO]

But "perceived" money "tied up" in houses people need to live in (therefore can't sell, or part sell) is not tangible. I'm not saying that we will all need to pay more, just that a tax on housing is not the way to do it. perhaps a tax on capital gains when sold MAY be fairer - I don't really know.

 

Plenty of other ways for the Government to save / make money.

 

Scrap the Northern legs of HS2, or at least put them into deep hibernation. The London - Birmingham section is too far into construction to cancel.

Road Tax - pay per mile. (ouch !!). 

Tax Havens (already mentioned) - repatriate ALL money & tax accordingly. £Billions if not Trillions - Theft on a grand scale to me. (Are you reading Sir Richard !!!!!)

Sort out the massive waste in our beloved and necessary NHS. Far too many non productive and expensive managers etc. Money saved here re invested in doctors, nurses & hospital infrastructure and equipment.

Similarly sort out Local / Central Government. Cull excessive and expensive management not services.

 

Any more anyone ?

 

I don't really mind a bit more on VAT. I can't see it being reduced though. A penny on Income Tax perhaps ?

 

Brit15

[Nearholmer]

3 minutes ago, APOLLO said:

(therefore can't sell, or part sell)

 

Its easy to part-sell a house: mortgage it.

 

Plenty of older people do it through equity-release mortgages*.

 

But, I agree, there are other ways to raises taxes ...... I'm just suggesting that the hunt is on for taxes that soak the old in order to shower the young, and that they aren't easy to devise.

 

*Which generally make no great financial sense, but work for some people (and work very nicely indeed for the mortgage holders!).

Edited January 18, 2021 by Nearholmer

[Nick C]

8 minutes ago, Nearholmer said:

 

Its easy to part-sell a house: mortgage it.

 

Plenty of older people do it through equity-release mortgages*.

 

But, I agree, there are other ways to raises taxes ...... I'm just suggesting that the hunt is on for taxes that soak the old in order to shower the young, and that they aren't easy to devise.

 

*Which generally make no great financial sense, but work for some people (and work very nicely indeed for the mortgage holders!).

 

How, pray tell, do you mortgage a house, when you're already mortgaged to the hilt to have bought it in the first place?

[Reorte]

On the house price front, whilst downsizing is something people can benefit from, and moving from expensive to cheaper areas (at the detriment of people already living in the cheaper areas) I think it's more a case of the young losing rather than the old benefiting.  I often wonder how many people really would lose out from a crash, and suspect it would be very significantly outweighed by those who gain. Those recoiling in horror at the idea of a crash often seem to do so on the basis of the entire economy crashing, which doesn't mean that a house price crash alone is a bad thing (but it's possible that it's impossible to have one without that downside).

[APOLLO]

4 minutes ago, Nearholmer said:

 

Its easy to part-sell a house: mortgage it.

 

Plenty of older people do it through equity-release mortgages*.

 

But, I agree, there are other ways to raises taxes ...... I'm just suggesting that the hunt is on for taxes that soak the old in order to shower the young, and that they aren't easy to devise.

 

*Which generally make no great financial sense, but work for some people (and work very nicely indeed for the mortgage holders!).

 

Why should anyone (especially those asset rich cash poor) i.e many pensioners, have to sell / take a loan out to pay taxes on home they live in, and have worked hard for and paid taxes over the years ?.

 

Hunt is on for taxes to soak the old ? - Really ? That is age discrimination grand style, and wrong on so, so many levels.

 

Shower the young ? WHY ? - When I was young I was never showered with money, gadgets, bling, etc etc . The young can get off their a***s and get out there and earn their crust, like I did, my son has done, and my twin daughters are doing RIGHT NOW in the living room their University work, Physics and Microbiology, needed subjects for the future, THEIR future.

 

I'd shower the young, half of them, with a bucket of **** and a boot up the **** !!!!!!!!!!!!

 

Brit15

[Nearholmer]

4 minutes ago, Nick C said:

How, pray tell, do you mortgage a house, when you're already mortgaged to the hilt to have bought it in the first place?

 

You can't, but that's not relevant to the question of attempting to tax capital - if a house is 100% mortgaged, you don't own any capital.

 

If, OTOH, what you are asking is how can a person afford to pay a further mortgage, when they are already shelling-out all their money on the one they have already, that to me indicates a person who isnt "in the cross hairs" to be taxed further ......... they don't have spare money kicking about. Very many older people do though.

[Nearholmer]

4 minutes ago, APOLLO said:

Shower the young ? WHY ?

 

Because they just suffered, and will go on suffering in the near-term, huge disadvantage in order to protect the old during the pandemic, and have already, since 2008, been hugely disadvantaged by the way total financial collapse was staved-off.

 

 

[APOLLO]

1 minute ago, Nearholmer said:

 

Because they just suffered, and will go on suffering in the near-term, huge disadvantage in order to protect the old during the pandemic, and have already, since 2008, been hugely disadvantaged by the way total financial collapse was staved-off.

 

 I think we have ALL suffered during this Pandemic (except the Chinese who started it - they are laughing at the world right now, and soon, unless we are careful they will own it).

 

For the 2008 collapse, blame the greedy bankers who quite literally gambled and lost (by the way where did all the lost £Trillions go, can't all be in The Bahamas etc ?).

 

Follow the money.

 

Brit15

[boxbrownie]

We (the old) have suffered as well and will do for a good few months yet, and had the frightening experience of the very real danger of being taken seriously ill or worse while these months have been going on, sure the young have (or should have) been stuck indoors, physically away from friends and school but they are young and will bounce back, we don’t and won’t bounce back but if luck still bobble along as before, we have 10/20 years before clogs are kicked, the young might have 60/70 years to go and catch up with their hiatus.

[Nick C]

18 minutes ago, Reorte said:

On the house price front, whilst downsizing is something people can benefit from, and moving from expensive to cheaper areas (at the detriment of people already living in the cheaper areas) I think it's more a case of the young losing rather than the old benefiting.  I often wonder how many people really would lose out from a crash, and suspect it would be very significantly outweighed by those who gain. Those recoiling in horror at the idea of a crash often seem to do so on the basis of the entire economy crashing, which doesn't mean that a house price crash alone is a bad thing (but it's possible that it's impossible to have one without that downside).

A house price crash would be catastrophic.

 

The only people who would benefit from a house price crash are those who can afford to buy outright - i.e. thosse who are already rich.

 

The people who would lose out most are those with mortgages, many of whom would be pushed into negative equity. 

 

Those who don't currently own wouldn't benefit, as the mortgage companies would demand signficiantly higher deposits to protect themselves from further falls (pushing the risk onto the buyer) - and the issue for most young people is finding the deposit, not the monthly payment.

[john new]

43 minutes ago, Nearholmer said:

 

I don't argue with any of that, but if the parlour game that the Chancellor has to play involves finding ways of taxing the prosperous part of the older generation, then a levy on house valuations, maybe N% on all homes where all occupiers are >65yo and the value is >national average, has to be one option on his sheet.

 

Additional VAT on a load of unambiguously non-essential goods and services must be another on the list.

 

Can anyone think of other suggestions? A levy on the valuation of occupational pension pots >£XYZ? 

 

The trouble with very targeted things is that they often don't bring in much money in the grand scheme of things, so maybe he will fall back on small % increases in VAT and income tax.

At the risk of mentioning the BREXIT word now we are out one of the benefits stressed by the leave campaign was that the UK, if out, would not have to follow EU tax rules which included VAT and imposed minimum rates etc. (Not sure if there was max rate). 

 

Whichever way you voted now we are out therefore VAT could be changed to reflect what pre-EU Purchase Tax was like - very high on luxury goods. There wasn't tax on kits, hence the Tri-ang CKD range - anyone else remember them? Even if sticking with VAT for efficiency and speed as all the collection mechanisms are in place the flat rate of 20% could/should go way up high for luxuries, whether that would again include hobby goods like model trains who knows. If it hasn't already gone then the giving it back at the airport for tourist bought stuff should perhaps also go.

 

The previous raids on pension pots was IIRC reckoned in hindsight to have been a disaster, so that should be avoided. The only one that is fair, to me, is high tax bands on luxuries, that too will have impact for some retail sectors but no one needs a fantastically expensive watch (as cheaper one's still tell the time) or the like - if the rich can afford one they can also afford to pay a massive  tax levy on them too.

 

How you regulate tax avoidance with offshore banking even still allowed in British zones (CI and IoM for starters) has either baffled previous Chancellors or it could be done but the will to do so isn't there.

 

[Reorte]

4 minutes ago, Nick C said:

A house price crash would be catastrophic.

 

The only people who would benefit from a house price crash are those who can afford to buy outright - i.e. thosse who are already rich.

 

The people who would lose out most are those with mortgages, many of whom would be pushed into negative equity. 

 

Those who don't currently own wouldn't benefit, as the mortgage companies would demand signficiantly higher deposits to protect themselves from further falls (pushing the risk onto the buyer) - and the issue for most young people is finding the deposit, not the monthly payment.

Those who would benefit are the ones currently priced out. The only real losers would be those pushed in to negative equity who need to move; if you don't need to move it's no actual change to your circumstances.

 

Other than in the short-term adjustment period I really don't find arguments that houses would be just as unaffordable if they weren't at historically record earnings to price ratios all that convincing - it's arguing for maintaining a currently broken and long-term very damaging situation.

[Andy Hayter]

One area that might be considered to "level" up the old v young might be to consider imposing National Insurance on pensioners.  Zero to pay up to a set amount ( more that the state pension) then progressive increase over that amount.

 

It has always seemed strange to me that when you are most likely to need the benefits of the NHS, you stop paying for it. 

[Reorte]

Just now, Andy Hayter said:

It has always seemed strange to me that when you are most likely to need the benefits of the NHS, you stop paying for it. 

 

I suppose the argument is that you pay in to it when you can in order to fund it for when you need it, like a pension.

[APOLLO]

For info just read this article.

 

https://www.dailymail.co.uk/news/article-9157951/Rishi-Sunak-warned-not-hit-Tory-shires-new-property-levy.html

 

Brit15

[john new]

19 minutes ago, Reorte said:

Those who would benefit are the ones currently priced out. The only real losers would be those pushed in to negative equity who need to move; if you don't need to move it's no actual change to your circumstances.

 

Other than in the short-term adjustment period I really don't find arguments that houses would be just as unaffordable if they weren't at historically record earnings to price ratios all that convincing - it's arguing for maintaining a currently broken and long-term very damaging situation.

 

Another tax that could be imposed is a very much higher rate of income tax on property letting, plus double or treble CTax rates on second homes.  Not sure what it is like in other areas but round here the monthly fees to rent a property seem much higher than it would cost for a mortgage if the same property could be bought.

 

As my mother is 97 at some point in the next few years my sister and I will inherit, if we choose to rent out Mum's house for income I can't see that having a high rate of tax imposed on that income would be unfair. There is no incentive to sell at the present time as the rental sector appears buoyant in many areas, although no doubt there are places where it feels like you can't even give a house away as that area has lost all the employment.

 

Edited January 18, 2021 by john new
Added the omitted note re CTax

[Neil]

1 hour ago, hayfield said:

 

At this moment everyone is having to make sacrifices, granted some more than others.

 

The young have never had it so good, at 11 years old I was doing an evening paper round at about 12 or 13 a morning paper round, at 14 I had a Saturday job in a hardware store and left school at 15 and started work (at the very bottom)

 

We had very few clothes, no computer games or mobile phones, no children's TV stations. Local councils had few if any youth clubs. Certainly never dreamed about a new or nearly new car cupboards full of clothes or trainers. The one thing we were taught was to go out and earn a living, usually by learning on the job (mostly in our own time)

 

 

 

I left school at sixteen for an apprenticeship. In the early eighties I was on the dole for over a year (as many were) but I had no need to use a food bank (were such things even around then?). At twenty five I bought my first house, not because I worked hard or had a high paying job, but because property prices were proportionate to the average wage. A few years later I went to college to re-train as a teacher. My degree was fully funded, I received a grant (as all students did) and a bursary.

 

My daughter left school at sixteen for an apprenticeship. She has worked hard but suffered unsecure employment and when she has required benefits to make ends meet has had to wait for six weeks before they kick in. She has not been able to buy her own home, it remains a distant prospect though she's in her early thirties. If she were to attempt to study for a degree, she would have to pay course fees and would not receive a grant or bursary.

 

Paper rounds, mobile phones, children's TV channels and the like are red herrings, peripheral to a proper assessment of the ills facing young people at this time.

[Nick C]

10 minutes ago, Reorte said:

Those who would benefit are the ones currently priced out.

No. No they wouldn't. 

 

Say, for a moment, you're a 20-something looking to buy your first house. You look on the market, and see that the average house price is £250,000. The mortgage company requires a 10% deposit, so you need to save up £25,000.

 

Now there's a crash - prices drop 30% overnight. 

 

The house you're looking at is now £175,000 - but the mortgage company doesn't want to take a risk of losing money - because if they'd sold that house to you last week, they'd now be at a loss, so they now insist on a 20% deposit. So you've now got to save up £35,000.

[Nearholmer]

7 minutes ago, APOLLO said:

For info just read this article.

 

Of course. I mentioned earlier that his boss has to work out how to do all this without ceasing to be the boss by losing a general election.

 

Taxes are never popular with those who have to pay them ........ but money is going to have to be raised somehow, The chancellor and PM have made that clear, if it wasn't obvious enough without being said out loud.

 

Pensioners paying NI sounds a good 'un, but I do wonder how much it would raise.

 

VAT on unarguably non-essentials, sounds workable up to a point, but purchase tax used to create all sorts of bizarre anomalies and be a nightmare of bureaucracy.

 

Any more ideas?

[Reorte]

2 minutes ago, Nick C said:

No. No they wouldn't. 

 

Say, for a moment, you're a 20-something looking to buy your first house. You look on the market, and see that the average house price is £250,000. The mortgage company requires a 10% deposit, so you need to save up £25,000.

 

Now there's a crash - prices drop 30% overnight. 

 

The house you're looking at is now £175,000 - but the mortgage company doesn't want to take a risk of losing money - because if they'd sold that house to you last week, they'd now be at a loss, so they now insist on a 20% deposit. So you've now got to save up £35,000.

 

There might be a transition but do you believe that would hold out long term?  I don't see where that increasing risk would come from - yes, during the fall, but there would be no need to maintain it when it's bottomed out. It's arguing that the difficulties of a fix means that a problem shouldn't be solved, and very expensive housing should be maintained forever.

[APOLLO]

I personally don't mind paying a bit more for the NHS, but I want that money to be wisely spent (and accountable somehow) and not disappear into a black hole, or to be trousered by "management"

 

Brit15

 

 

[hayfield]

53 minutes ago, Nearholmer said:

 

Is it a real benefit? Yes. It can be used as collateral for loans to release cash, in very many cases it could, if desired, by used to release cash by down-sizing or moving to a cheaper area, and it can (and in many cases probably will one day) by used to release cash to fund a more comfortable care home than is available to those who don't have it in the twilight years, or give a "leg up" to the next generation in that family.

 

Not only has the disproportionate affect since 2008 transferred capital to older people, it has further cemented inequality that perpetuates through generations; to caricature, it made the rich richer, and the poor poorer.

 

 

Kevin

 

I really take offence at these unfounded remarks

 

Thankfully I was forced into buying my house due to the lack of both social housing or availability of rentable housing, unlike many others much of our money was directed towards our home, rather than going down the pub, buying new cars or going on expensive holidays. Many of us chose the house over lifestyle

 

We bought the cheapest property on the market in our area, a flat in a run down house, in one of the worst area of Watford, everything we had was second hand, mostly donations. We did the flat up then brought a wreck of a terraced house, this was gutted and with the assistance of friends was bought up to standard, eventually we moved to a semi. Like many others we struggled to pay the mortgage, those in council houses had far better lifestyles than us for many years, many times we went without just to keep our house. You could say we have paid our rent in advance as the asset will benefit others financially

 

In the end we sold our property for a good price, were able to move to a nice area close to our daughter and her family, in the past 5 years we have redeveloped our property into what we think is a much nicer property and have been able to put a bit away, We are mortgage/rent free down to busting a gut over the past 45 years, not benefitted from either state hand outs or inheritances, but we can pass something to our daughter when we have gone.

 

But when we sold our last property it was to an industrious younger migrant family, who like us pushed ourselves to better our situation in their case for their daughters education.