“Those drawing on wealth or income from additional properties are disproportionately rich and wealthy”

by Property 118

4 weeks ago

“Those drawing on wealth or income from additional properties are disproportionately rich and wealthy”

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“Those drawing on wealth or income from additional properties are disproportionately rich and wealthy”

The Resolution Foundation, a Tory think tank with former cabinet minister and Conservative lord David Willetts as executive chair, has published an article concluding that “those drawing on wealth or income from additional properties are disproportionately rich and wealthy.”

Click here to read the full article.

The article states there is a case for further action beyond Stamp Duty surcharges for second homes and Section 24 mortgage interest relief reductions, because “the younger generations are failing to accumulate wealth at anything like the rate of their predecessors.”

They advocate:

  • Greater regulation of the PRS
  • Increased security of tenure for tenants
  • Further taxation on very affluent people
  • Implementing the White Paper commitment to tackle empty homes

“These are options and challenges our Intergenerational Commission will continue to explore, because from the perspective of many of Britain’s real ordinary folk who still desire to own their home but find doing so increasingly out of reach, one house would be enough.”

Their policies are based on the rise of second and multiple property owners against the decline of main residence home owners in the last 15 years.

The figures cited are that the share of British adults in families with any property wealth fell 8%, whilst the share with multiple property wealth increased by 30%.

However, they admit that when looking at property wealth trends they have not even taken into account the net wealth after finance!

The report said: “Disregarding mortgage debt (because of difficulties in identifying which properties mortgages are secured against), the assets held in second or additional properties had a gross value of £760 billion in 2012-14 (adjusted to 2017 prices) – that’s 15% of the £5.2 trillion held in gross property wealth overall. This equates to an average of £150,000 per adult with multiple sources of property wealth, a 20% increase since 2000-02. With average net total wealth just over £200,000 in 2012-14, and typical (median) wealth just £84,000, owning multiple properties clearly represents a huge wealth boost.”

This report is looking at the symptoms of the disease and not the disease which is quite simply a failure of supply to keep up with demand increasing prices beyond wage inflation. Economics 101 surely?

There has been a total failure by government in the last 20 years to build or help create the environment to build, enough properties year on year to the point where we are now.

Comments

Gary Nock

4 weeks ago

Yet another left wing view dressed up as a Tory idea. Have Momentum infiltrated the Tories Fringe Think Tanks as they did the Labour Party? The way things are going landlords will be pulling out in droves even more than they are now and tenants will have less and less properties to rent. And they won't be able to buy because they can't raise the deposit.

Mark Alexander

4 weeks ago

I forsee an increasing number of empty properties if further attacks are launched against landlords.

Most tenants can't get a mortgage, don't want a mortgage or prefer to spend the cash they have rather than saving for a deposit.

If there is any consolation the resolution is known by some to be left wing. As for the former tory mp whom has a senior position there it should be noted also he has a flat in south west london that he did rent out and possibly still does. So hopefully it will just forgotten.

Mark Alexander

4 weeks ago

The headline alone is stating the bleeding obvious isn't it?

Most people struggle to fund one deposit to buy a property, so anybody who can fund several is obviously "disproportionately rich" regardless of whether they decide to invest their wealth into buying more properties or not!

Deborah Clare

4 weeks ago

Not every landlord is wealthy. In my case, I draw a small income from my properties because I still need to house my (just about) adult kids. If I don't provide them with somewhere cheap to live, they would become homeless. With wages being so poor around this area, my little bit of rental income supplements my earned income and means 3 adults can have a roof over their heads, as well as providing several single parents with nice, well kept homes that they would find it difficult to replace if I chose to dispose of the properties!

Mark Alexander

4 weeks ago

Hi Deborah

Yes I totally get that, but the fact you own those properties makes you disproportionately wealthy in comparison to the people you rent them too, hence my flippant comment.

Deborah Clare

4 weeks ago

I get your point Mark, but it's 'wealth' that has been earned. It might not be the case all over the UK, but where I live, it's still possible to do as I did many years ago. Work two jobs and save like mad whilst living with grandparents, with not much social life and no holidays until you have a deposit. (Roughly £10,000). Get the house and mortgage. Have two lodgers and still have a very limited social life and no holidays for a couple of years whilst still saving like mad to over pay the mortgage! Continue to live fairly frugally for the next 20 years and be able to fund deposits from first mortgage now being paid off. I am a firm believer in working hard for what you want, but it seems that today, not many are happy with a small run down terraced house as a starter home and working a 60 hour week. It may be a struggle, but if you want it, it's worth the struggle.

Mark Alexander

4 weeks ago

I completely agree with all of that Deborah. Those are the reasons people become "wealthy" unless they are lucky enough to win the lottery or inherit of course. The reasons you have stated are the very same reasons "“Those drawing on wealth or income from additional properties are disproportionately rich and wealthy”, which was the title of this article and the stupid 'Think Tank' who came up with this obvious conclusion whilst being oblivious to the fact that wealth actually comes from hard work and abstinence over long periods of time. What really narks me is that these boffins have also concluded that to remove aspirations from pretty much everybody would actually benefit anybody.

Deborah Clare

4 weeks ago

Maybe boffins want to remove aspirations, but from what I see, today's youth often don't have many aspirations anyway. They would rather spend on holidays, cars and designer clothes. Oh dear, I'm sounding very old!

Mark Alexander

4 weeks ago

Maybe we are getting old, or perhaps the boffins are to blame for the apathy of the youth, maybe a bit of both?

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