Should council house rents be at normal market value?

[donkey]

donkey, what do you mean by 'speculators'? Anyone fitting that profile is a tiny part of the housing market, and I mean so tiny as to have negligible if any impact.

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There is massive speculation on housing stock. I work in removals and see it every day. For a lot of people, owning a second and third home is now the prefered option to having a pension fund. And how many pension funds speculate in housing anyway? They are expecting those houses to go up in value. That is speculation. If 10 people who want a home in a certain area, it will create upward pressure on the property in that area, add to that another 5 who want property as investment in that area and that pressure on prices will increase massively. When houses are shooting up in value it has the effect of making more and more people think there is fast cash to be made (you will have noticed there are even programmes on the TV about how to be a property speculator).Speculation is not the only inflationary pressure on the housing market, but it is certainly the easiest one to control.

[donkey]

Bus and train prices aren't controlled, in fact they are the polar opposite - they are subsidised.

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The point is that state intervention in the provision of certain goods and services is not tantamount to communism, as Cyclone appeared to be saying.

 

Healthcare is hugely expensive in the UK

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This is a fallacy which was said often during the recent healthcare derbate in the USA, which on inspection turned out not to be true at all. The UK is not even in the top ten of global per capita health care costs. The US, with its' fully privatised (up until now) system, pays the most.

 

http://www.mapsofworld.com/world-top-ten/countries-that-spend-most-on-healthcare.html

 

Like a lot of things, this is one of those 'facts'that has been pushed so successfully by the free market propagandists (they spend more promoting their own interests than the proponents of all other ideologies put together)

that many people now accept it as a fact.

[anywebsite]

There is massive speculation on housing stock. I work in removals and see it every day. For a lot of people, owning a second and third home is now the prefered option to having a pension fund. And how many pension funds speculate in housing anyway? They are expecting those houses to go up in value. That is speculation. If 10 people who want a home in a certain area, it will create upward pressure on the property in that area, add to that another 5 who want property as investment in that area and that pressure on prices will increase massively. When houses are shooting up in value it has the effect of making more and more people think there is fast cash to be made (you will have noticed there are even programmes on the TV about how to be a property speculator).Speculation is not the only inflationary pressure on the housing market, but it is certainly the easiest one to control.

 

One person's speculator is another's private landlord. Speculators & investors don't usually want to leave the houses empty.

 

The speculators that inflate an asset bubble the most are the ones that get burned the most when it crashes, there is already a natural justice there.

[Tony]

donkey, from your description it sounds like you are talking about investment rather than speculation.

 

As for healthcare I didn't make any comparison because none is needed - it is hugely expensive in its own right and the people within it are often paid extraordinary sums. Many ordinary workaday GP's in Sheffield are earning as much as the CEO's of billion pound local authorities. Is that the result of genuine supply and demand or is something else more insidious at work - like social housing rents?

[donkey]

Trying to directly regulate house prices would be perverse and probably impossible.

 

'Perverse'? In what way? It would be easy. By taking away the possiblilty of rental income outstripping the mortgagable value of the house, and imposing heavy taxes on people who sell on houses without having lived in them for a certain period, a huge amount of the inflationary pressures would be dealt with. I agree that tightening up the amounts banks lend would also be helpful.

[donkey]

donkey, from your description it sounds like you are talking about investment rather than speculation.

 

As for healthcare I didn't make any comparison because none is needed - it is hugely expensive in its own right and the people within it are often paid extraordinary sums. Many ordinary workaday GP's in Sheffield are earning as much as the CEO's of billion pound local authorities. Is that the result of genuine supply and demand or is something else more insidious at work - like social housing rents?

 

The doctor's and some of the administrators in the NHS get paid too much. There is an obvious solution on hand with the administrators but it is hard to know how to siolve the problem of inflated doctors wages. The doctors are providing an essential service. On ther other hand, houses will still be built and sold to people who want to live in them without the intervention of middle men who inflate the price and then sell the house on, without having added a single unit to the housing stock. They are not provioding an essential service, but what rthey are speculating in is an essential comodity.

[Tony]

Doctors are no more essential than administrators. Neither would exist without the other so obviously some type of market is in action that determines wages.

 

You have plenty of choice in housing though and still you have enormous choice. It doesn't seem to be a market that needs regulation by any measure that I can see.

[Wildcat]

Doctors are no more essential than administrators. Neither would exist without the other so obviously some type of market is in action that determines wages.

 

You have plenty of choice in housing though and still you have enormous choice. It doesn't seem to be a market that needs regulation by any measure that I can see.

 

A) If I need a medical intervention then personally I think the one qualified is essential. Do you get operated on by people trained as Administrators in BUPA?

 

B) We had buildings not covered by regulation a century ago. They were pulled down as slums if they hadn't already fallen down in the 50s.

[Tony]

A) If I need a medical intervention then personally I think the one qualified is essential. Do you get operated on by people trained as Administrators in BUPA?

 

B) We had buildings not covered by regulation a century ago. They were pulled down as slums if they hadn't already fallen down in the 50s.

 

 

A. Go and catch up with the actual discussion rather the one you think we're having if you really want to join in.

 

B. Go and catch up with the actual discussion rather the one you think we're having if you really want to join in.

 

A + B = pointless interjection

[Cyclone]

'Perverse'? In what way? It would be easy. By taking away the possiblilty of rental income outstripping the mortgagable value of the house, and imposing heavy taxes on people who sell on houses without having lived in them for a certain period,

Capital gains tax you mean. It already exists.

Why are you linking rental income with mortgageable value. Someone actually buying to let isn't speculating on the price going up, they're expecting an ROI on the investment they make. Someone speculating doesn't need to bother with a tenant at all, just sit on it and wait for the price to change.

a huge amount of the inflationary pressures would be dealt with. I agree that tightening up the amounts banks lend would also be helpful.

I don't think regulating rents would achieve anything at all, and whilst a different rate of capital gains on housing might be possible, it wouldn't have stopped speculation during the last housing bubble, nor would it have stopped people investing in BTL (since capital asset changes are only a bonus when you have a decent ROI).