Britain is losing the housing war. We must stop the blockers. Embracing friction is now necessary. No one will love every change, but they may come to appreciate what it makes possible.
High house prices are not a function - primarily - of a supply shortage. The ONS stats indicate that we have built roughly enough dwelling units to cover the population increase. Except for immigration - possibly / probably.
High house prices are a function of government failure. Failure not only with planning but principally with taxation policy, subsidy policy, currency failure and unwarranted currency expansion.
In the UK we tax production - labour, capital and entrepreneurs - and subsidise and / or under-tax land. And land is parasitical.
So to sort out house, aka land , prices you must:
Have sound money and stop credit expansion.
Shift tax from wealth creating production to rents
Stop landlord subsidies like housing benefits etc
Sound Money is the key. And you'll have fun getting that past The Blob. The idiot socialists and the rent seeking Tories.
Hi again Steve. I’ve had a look at some of your reply’s to others here on Substack. You make some interesting posts.
You state in this reply that the Government taxes production? But it doesent. it taxes SPENDING.
For example we know vat and duty is placed on the figure we all SPEND. That’s workers non workers and benefit recipients alike. Everyone pays the same rate on that purchase.
But despite income tax having ‘income’ in the heading, and that it’s calculated on wages and that the person is liable for that tax it is in fact triggered by the SPENDING of that business.
Wages are triggered by the business, the employer SPENDING, its money, on that employee. Without the ‘business’ employing that employee there is no wages or tax. It’s a combined cost of employment paid by the employer from the profits and turnover of that business earned by the SPENDING of their customers and consumers. There is no business or employment without their SPENDING. The customer. Us! We all SPEND and when we do tax is triggered.
That fact is lost in people. They misunderstand taxation as a result.
Tax paid by the employer is just part of the cost of employment. Not production. It don’t matter how hard you work or not work. Tax is paid by the ‘business’ the ‘employer’ not the employee. The employer never receives that money. They can’t use it or buy and sell, with it or keep it. They never get it. It’s a slight if hand as they get a Bernie Madoff style statement to say they have paid it when they didn’t. Their employer paid it. Triggered by the employers SPENDING.
In the case of the self employed it’s still SPENDING that triggers the tax.
The SPENDING of their customers or consumers triggers the tax. The self employed person gets the money. Uses the money and then pays that amount to the inland revenue later. At least they get to use it. But it’s not production that gets taxed. It’s at the point of their customers SPENDING and employing that self employed person that triggers a tax take.
Without SPENDING there is no tax take!
We know this because NOT SPENDING triggers NO tax! Money that is UNSPENT or UNUSED triggers NO tax!
So everyone pays tax on money moving via SPENDING it. Or money moving because they are TOLD to SPEND it like Council Tax. Inheritance TAX or a windfall tax. We are told to SPEND that amount on tax. It’s still money moving via the need or trigger of SPENDING Steve.
Once you grasp that nettle then you can see it’s not the worker who pays for the non worker. It’s the SPENDER who pays more tax pro rata than the NON SPENDERS. It’s the NON SPENDER who gets away with paying NO tax on that UNSPENT money.
“We the taxpayer” is therefore a common error. We are all equal pro rata taxpayers. But only when we SPEND Steve!
Those who DONT SPEND Steve, pay NO TAX on that UNSPENT money! NONE!!
That’s why the rich, in the main, pay less tax pro rata than anyone else. Because they only SPEND part or none of their incomes. The part they don’t spend pays no taxes.
So money held beyond the need of others, say monthly, is missing in action from the pot, we all need to pay us! That’s why money gets ‘tight’ not because of the lack of it but, from the fact our daily productive pot is devoid of it! It’s underfunding the goose that lays the golden eggs Steve. Us. The vast majority of us is waiting for it! But instead of getting it back by their SPENDING of it we are forced to wait! So instead of going bust we borrow! Just like our governments do! From the very people who withhold it from us in the first place.
Who do you think can afford to buy gilts?
The people holding the money of the people who haven’t SPENT it!
I hope this post helps you understand that money and spending is the economy. The amount of money in it matters. Money not in it sidelined unused or unspent matters to that pot, the more in it the better. The more not in it the worse the economy gets. It’s simple Steve!
An economy is only as good as the amount of money in it being SPENT. And us made worse by the amount of money NOT in it!
All taxes are triggered by SPENDING or money moving. Money not moving contributes nothing to the economic pot nor does it trigger tax.
Rather than the NIMBY/YIMBY approach I'd say it's more about trust and the social contract between us the citizens and the government.
The government has spent several years importing people, legally and illegally, against the wishes of the majority of voters. We do not trust that any housing built is being built in the interests of voters.
Nowhere in this article is immigration mentioned and yet I would say it is a serious concern of the NIMBY brigade.
High quality housing, for high quality citizens, on estates that are well connected and well served by infrastructure are the least contentious. If that can bring new pupils for village schools, new doctor surgeries, new community centres and sports facilities then there would be something in it for local people. They might just go along with it.
But we see a failed 14 year Tory government that imported millions, directly opposing the will of the people. We now see that policy now continuing under Labour and nothing being done about illegal immigration.
The Uniparty need to own that failure. It will take a long time until people are ready to tolerate building the housing to deal with it.
I agree that trust in government matters, esp vis-a-vis immigration. My focus here was more structural rather than motivational, though. The planning system we have produces under-supply regardless of what people think housing is ‘for’. Even in a UK of zero net migration, we’d still be rationing homes through discretionary local vetoes because what we've set up was inevitably going to lead to distrust anyway, hence the YIMBY/NIMBY focus. That’s why the system itself needs reform, so outcomes don’t depend on perfect trust in government.
Exactly. Once the Act passed and nationalised our development rights, housing outcomes stopped being driven by demand and started being driven by local vetoes. That’s why trust alone can’t fix this. The institutional setup itself produces under-supply and resentment.
You raise some good points. Maybe one day in the distant future we'll get some semblance of a government willing to undo the damage. Either way, bad planning amplifies the effects of cheap credit by locking supply, including the aftereffects of our current system.
Serendipity strikes again - this link was in my inbox today
https://mises.org/mises-wire/why-have-homes-become-so-unaffordable
Worth a read.
High house prices are not a function - primarily - of a supply shortage. The ONS stats indicate that we have built roughly enough dwelling units to cover the population increase. Except for immigration - possibly / probably.
High house prices are a function of government failure. Failure not only with planning but principally with taxation policy, subsidy policy, currency failure and unwarranted currency expansion.
In the UK we tax production - labour, capital and entrepreneurs - and subsidise and / or under-tax land. And land is parasitical.
So to sort out house, aka land , prices you must:
Have sound money and stop credit expansion.
Shift tax from wealth creating production to rents
Stop landlord subsidies like housing benefits etc
Sound Money is the key. And you'll have fun getting that past The Blob. The idiot socialists and the rent seeking Tories.
Hi again Steve. I’ve had a look at some of your reply’s to others here on Substack. You make some interesting posts.
You state in this reply that the Government taxes production? But it doesent. it taxes SPENDING.
For example we know vat and duty is placed on the figure we all SPEND. That’s workers non workers and benefit recipients alike. Everyone pays the same rate on that purchase.
But despite income tax having ‘income’ in the heading, and that it’s calculated on wages and that the person is liable for that tax it is in fact triggered by the SPENDING of that business.
Wages are triggered by the business, the employer SPENDING, its money, on that employee. Without the ‘business’ employing that employee there is no wages or tax. It’s a combined cost of employment paid by the employer from the profits and turnover of that business earned by the SPENDING of their customers and consumers. There is no business or employment without their SPENDING. The customer. Us! We all SPEND and when we do tax is triggered.
That fact is lost in people. They misunderstand taxation as a result.
Tax paid by the employer is just part of the cost of employment. Not production. It don’t matter how hard you work or not work. Tax is paid by the ‘business’ the ‘employer’ not the employee. The employer never receives that money. They can’t use it or buy and sell, with it or keep it. They never get it. It’s a slight if hand as they get a Bernie Madoff style statement to say they have paid it when they didn’t. Their employer paid it. Triggered by the employers SPENDING.
In the case of the self employed it’s still SPENDING that triggers the tax.
The SPENDING of their customers or consumers triggers the tax. The self employed person gets the money. Uses the money and then pays that amount to the inland revenue later. At least they get to use it. But it’s not production that gets taxed. It’s at the point of their customers SPENDING and employing that self employed person that triggers a tax take.
Without SPENDING there is no tax take!
We know this because NOT SPENDING triggers NO tax! Money that is UNSPENT or UNUSED triggers NO tax!
So everyone pays tax on money moving via SPENDING it. Or money moving because they are TOLD to SPEND it like Council Tax. Inheritance TAX or a windfall tax. We are told to SPEND that amount on tax. It’s still money moving via the need or trigger of SPENDING Steve.
Once you grasp that nettle then you can see it’s not the worker who pays for the non worker. It’s the SPENDER who pays more tax pro rata than the NON SPENDERS. It’s the NON SPENDER who gets away with paying NO tax on that UNSPENT money.
“We the taxpayer” is therefore a common error. We are all equal pro rata taxpayers. But only when we SPEND Steve!
Those who DONT SPEND Steve, pay NO TAX on that UNSPENT money! NONE!!
That’s why the rich, in the main, pay less tax pro rata than anyone else. Because they only SPEND part or none of their incomes. The part they don’t spend pays no taxes.
So money held beyond the need of others, say monthly, is missing in action from the pot, we all need to pay us! That’s why money gets ‘tight’ not because of the lack of it but, from the fact our daily productive pot is devoid of it! It’s underfunding the goose that lays the golden eggs Steve. Us. The vast majority of us is waiting for it! But instead of getting it back by their SPENDING of it we are forced to wait! So instead of going bust we borrow! Just like our governments do! From the very people who withhold it from us in the first place.
Who do you think can afford to buy gilts?
The people holding the money of the people who haven’t SPENT it!
I hope this post helps you understand that money and spending is the economy. The amount of money in it matters. Money not in it sidelined unused or unspent matters to that pot, the more in it the better. The more not in it the worse the economy gets. It’s simple Steve!
An economy is only as good as the amount of money in it being SPENT. And us made worse by the amount of money NOT in it!
All taxes are triggered by SPENDING or money moving. Money not moving contributes nothing to the economic pot nor does it trigger tax.
Rather than the NIMBY/YIMBY approach I'd say it's more about trust and the social contract between us the citizens and the government.
The government has spent several years importing people, legally and illegally, against the wishes of the majority of voters. We do not trust that any housing built is being built in the interests of voters.
Nowhere in this article is immigration mentioned and yet I would say it is a serious concern of the NIMBY brigade.
High quality housing, for high quality citizens, on estates that are well connected and well served by infrastructure are the least contentious. If that can bring new pupils for village schools, new doctor surgeries, new community centres and sports facilities then there would be something in it for local people. They might just go along with it.
But we see a failed 14 year Tory government that imported millions, directly opposing the will of the people. We now see that policy now continuing under Labour and nothing being done about illegal immigration.
The Uniparty need to own that failure. It will take a long time until people are ready to tolerate building the housing to deal with it.
I agree that trust in government matters, esp vis-a-vis immigration. My focus here was more structural rather than motivational, though. The planning system we have produces under-supply regardless of what people think housing is ‘for’. Even in a UK of zero net migration, we’d still be rationing homes through discretionary local vetoes because what we've set up was inevitably going to lead to distrust anyway, hence the YIMBY/NIMBY focus. That’s why the system itself needs reform, so outcomes don’t depend on perfect trust in government.
Is not the prime fault with the 194?? Town and Country Planning Act? Did that not de facto 'nationalise' land?
Exactly. Once the Act passed and nationalised our development rights, housing outcomes stopped being driven by demand and started being driven by local vetoes. That’s why trust alone can’t fix this. The institutional setup itself produces under-supply and resentment.
Yep. That post WW2 Labour nationalisation spree has proved to be a total disaster in so many ways. e.g. Nationalised Health Shambles.
But, the elephant in the room is bad money and out-of-control central banking (also nationalised in 1947/2000). See my comment below for why.
You raise some good points. Maybe one day in the distant future we'll get some semblance of a government willing to undo the damage. Either way, bad planning amplifies the effects of cheap credit by locking supply, including the aftereffects of our current system.
Yeah. It is double trouble