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Milking the poor to make the rich.. richer.

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What a nasty, mean spitited, and anally retentive person you must be; I almost feel sorry for you.

Do you try hard to be spiteful and offensive or does it come naturally?

 

I think Conrod is a con and just tries winding up others.No one can seriously hold such views.However these thoughts are lodged in his head and seem to flow quite spontaneously so you might be right about his retentive qualities.

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I think Conrod is a con and just tries winding up others.No one can seriously hold such views. . . . . .
Oh, they can.

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Its refreshing to see that the USA also has teachers that trade in cliche.Did they also teach you that if you laid all the economics teachers in a straight line,you would not reach a consensus.I take you were in the poor group.

 

Actually, I was in the rich group. ;)

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I know people who have started out fabulously, inherited money, businesses and other assets, but in less than 10 years, have nearly lost it all.

 

Lotto winner Callie Rogers is now penniless

 

'Lotto lout' Michael Carroll back on the dole after squandering his £9.7m on drugs and prostitutes

 

Lottery winner dies penniless after heart attack from money worries

 

[Another £9 million winner.]

'I blew the lot' £5.5m lottery winner flees Spain penniless as bank seizes villa and bar

 

Lottery winner jailed for benefit fraud after squandering £100,000

 

It certainly takes a perverse skill to squander more money than any 10 people might earn in a lifetime.

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Lotto winner Callie Rogers is now penniless

 

'Lotto lout' Michael Carroll back on the dole after squandering his £9.7m on drugs and prostitutes

 

Lottery winner dies penniless after heart attack from money worries

 

[Another £9 million winner.]

'I blew the lot' £5.5m lottery winner flees Spain penniless as bank seizes villa and bar

 

Lottery winner jailed for benefit fraud after squandering £100,000

 

It certainly takes a perverse skill to squander more money than any 10 people might earn in a lifetime.

 

It certainly does. One wonders how they do it, but then it's amazingly easy to spend money.

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Lottery winners aren't really good examples though. They neither value the money from having had to work to make it, nor are raised to have a sensible attitude to it. Most lottery tickets are bought by people on society's lowest rungs, so it's hardly surprising when winners turn out to be thick as mince.

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Lottery winners aren't really good examples though. They neither value the money from having had to work to make it, nor are raised to have a sensible attitude to it. Most lottery tickets are bought by people on society's lowest rungs, so it's hardly surprising when winners turn out to be thick as mince.

 

Lottery winners are probably the worst example, this is true. But many people who are born into money don't value it enough, either.

 

These people do ok as long as they can keep raking it in, but if business takes a downturn or they lose their well paying jobs, things can go bad in a hurry. The only upside is they have a lot of expensive stuff to sell if they need cash in a hurry.

 

The problem low income people have is for them, there is less margin for error. One missed paycheck means they may be out on the street or they go hungry.

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Lottery winners aren't really good examples though. They neither value the money from having had to work to make it, nor are raised to have a sensible attitude to it. Most lottery tickets are bought by people on society's lowest rungs, so it's hardly surprising when winners turn out to be thick as mince.

 

And then we have the Sheffield couple the Wraggs, who did work hard all their lives, and have made countless other folks lives better with their lottery winnings: http://www.thestar.co.uk/lifestyle/features/lotto-winners-mark-decade-of-charity-1-310700

 

My guess is there are more like them than the ones who have lost the lot, we just don't hear about the good stories. ;) And, although the losers may not have been the brightest, that doesn't apply to the millions whose only flutter is the lottery. I'd like to think if I ever won millions that much of it would be put to good use. I already have a plan. :roll:

 

I agree with Sierra, family fortunes can go up and down, and although most of us have enough to get by, there are lots living on a financial knife edge. That isn't always down to the individual, life has a way of intervening with stuff like redundancy and poor health.

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Don't you just love the little people on this website?

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So in this scenario two people working for the same company and earning the same wage with one renting and enjoying life’s luxuries and the other buying their own property to give them security in their old age, the one that buy property would pay the most tax, and when they both retire the property owner would no doubt continue to pay tax whilst the other got everything for free on benefits.

 

Slightly different scenario with the one renting earning double that of the prudent property owner, I assume the renter would still pay less tax if they spent all their money on foreign holidays and still get a free ride in retirement.

 

Doesn’t sound that fare to me, and the property situation can easily be solved by banning buy to let and encouraging build to let, banning second home ownership or putting your property tax on second homes.

Shelter is one of the main essentials of life and to tax it is immoral. Second homes aren’t an especial of life so taxing them would be fare.

Removing tax from life’s essentials and increasing vat on the luxuries that only the better off can afford would be fare.

 

---------- Post added 02-12-2012 at 08:06 ----------

 

 

I would say the renter should pay more tax because they will be entitled to more benefits if they lose their job or retire, the home owner is a much lower burden when they retire because they have no rent to pay, home ownership should be encouraged not discouraged, based on your plans I don’t see why anyone would buy their own house when renting is cheaper and free whilst on benefits or retired. That would leave the problem of who would own all these properties that are being let for less than one could gain by have the same capital in a bank.

 

I think you're looking at it in the wrong way, entirely the wrong way.

 

I think your arguments are a fallacy of composition. You are arguing that what is best for individuals is best for society as a whole. It isn't necessarily the case. Making buying cheaper than renting means that more people will obviously buy, home ownership will be increased.

 

Very high levels of home ownership are a drag on the economy. Economic resources become tied up. Houses cannot change hands as easily. It locks workers into locations and it makes it harder for people to migrate around the country to follow work opportunities. High levels of home ownership also means high levels of personal debt - this is especially the case when housing becomes the focus of a speculative bubble. That renter you described who is spending freely, being a consumer, is what the economy needs. The economy doesn't need people spending massive chunks of their income on poor housing, living in fear over losing their house and afraid to spend in the wider economy.

 

So, given the current economic situation if somebody can be seen to have a good life while not buying that is probably a good thing as it would clearly illustrate that there is a life other than busting ones guts to purchase and hold onto a heap of rotten bricks. The missing bit now is getting the right houses built, so the people who will pull us out of this mess are not be beholden to amateur private landlords.

 

---------- Post added 03-12-2012 at 08:16 ----------

 

That sounds entirely paradoxical.

Someone has to own that property, and if they are letting it then it will be for a profit, so renting should always cost more than buying. Inflation distorts this though.

 

You made a lot of responses so I'll start working through them.

 

Why is renting being cheaper than buying paradoxical? I guess you might have a case in the current housing market where to rent out a house as a private landlord you need to buy it at a massively inflated price, maybe do it up, cover repairs and tax etc....

But....the problem with that model is that to become a BTL landlord you almost always have to select an old property from a poor housing stock. It costs a lot. It may be old. It may need a lot of maintenance. This is not an efficient way of delivering housing into the rental market. It's the most economically inefficient way, absolutely the worst I can imagine. What's worse is the overall cost of renting is pinned to an asset class that has been subject to a speculative bubble - go figure.

 

So, in a newer and brighter world the potential BTL investor gets to work in partnership with the government. Land is freed up for him to use in locations where government/councils want units built. He has a set of standards to work with, a minimum standard of housing that needs to be delivered into the rental market. The investor might get to build several high quality units for rent. The outlay is perhaps comparable to what the investor would spend now on a single crappy house to do up. Unit build costs are driven down by economies of scale. Rents can be low and still deliver a good profit to the investor. The renter and the landlord are happy - both get what they want.

 

Now imagine that you wanted to build one of those houses privately for yourself. You are not going to get the economies of scale, you need to pay the mortgage and maintain it. It is going to be more expensive. Simple as that. You have also taken an economically productive unit out of wider use, for your own use - that should attract a premium. That said if we had a housing market that was not in a bubble the overall cost of this, even for the private buyer, would be lower than what it is today.

Edited by I1L2T3

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At least you're not turning the thread into a personal swipe.

 

But that's precisely what you were doing by posting 'feeling the need to clean the car's tyres after driving through an estate', and then making sneering comments about people who live there.

Looking down your nose at others doesn't make you big or better, it just makes you look inadequate - and the fact that you can't take what you dish out confirms this.

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Why is renting being cheaper than buying paradoxical?

I did explain this in the post.

 

If renting was cheaper than buying, then no rental property would exist as no one could make a profit (since the income from letting is less than it cost them to buy).

I guess you might have a case in the current housing market where to rent out a house as a private landlord you need to buy it at a massively inflated price,

Inflated or otherwise, if you had to buy it and the return was less than you had to pay then no one would be a landlord.

maybe do it up, cover repairs and tax etc....

You will always have to cover maintenance costs and pay tax.

But....the problem with that model is that to become a BTL landlord you almost always have to select an old property from a poor housing stock. It costs a lot. It may be old. It may need a lot of maintenance.

Those things would still be true if someone bought the house to live in.

This is not an efficient way of delivering housing into the rental market. It's the most economically inefficient way, absolutely the worst I can imagine. What's worse is the overall cost of renting is pinned to an asset class that has been subject to a speculative bubble - go figure.

The cost of renting is related to the cost of housing yes. But even if there was no bubble then a landlord would always expect a profit and so renting would have to cost more than buying so that the landlord could make that profit.

 

So, in a newer and brighter world the potential BTL investor gets to work in partnership with the government. Land is freed up for him to use in locations where government/councils want units built. He has a set of standards to work with, a minimum standard of housing that needs to be delivered into the rental market. The investor might get to build several high quality units for rent. The outlay is perhaps comparable to what the investor would spend now on a single crappy house to do up. Unit build costs are driven down by economies of scale. Rents can be low and still deliver a good profit to the investor. The renter and the landlord are happy - both get what they want.

But given that the person who might rent has the same options of building (maybe in a group to get economies of scale) or buying from a builder who definitely gets the economies of scale, the rent will be higher than the equivalent purchase price.

If it wasn't then there would be no demand for renting and no landlord would build anything.

 

Now imagine that you wanted to build one of those houses privately for yourself. You are not going to get the economies of scale

So you buy from an investor who built 10 in order to sell them. Or you club together with other people who wish to build.

you need to pay the mortgage and maintain it. It is going to be more expensive. Simple as that.

Your entire argument rests on BTL landlords being able to build many units and make a profit due to economies of scale... I don't think it works.

You have also taken an economically productive unit out of wider use, for your own use

That is exactly what renting does. Two people cannot rent the same property, so it is taken out of use when it is rented. Economically it is identical.

- that should attract a premium. That said if we had a housing market that was not in a bubble the overall cost of this, even for the private buyer, would be lower than what it is today.

Is there really any evidence that the housing market is still inflated? Has it not yet reached the long term average as it's been static for nearly 5 years now.

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