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

by Property 118

16:31 PM, 21st August 2017
About 2 years 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

Chris Daniel

20:33 PM, 27th August 2017
About 2 years ago

Reply to the comment left by Old Mrs Landlord at 22/08/2017 - 08:40
What's fair -
for all the public sector is years of Austerity, - and what's fair for Politician's is 8% pay increase !!!!

Mike D

13:53 PM, 29th August 2017
About 2 years ago

There is an 'Old' adage, that money makes money......
And that is why there are Rich & Poor....Rich people become that way, by working hard, not spending all their money, saving, investing and accumulating wealth......
On the other hand, the poor generally hold themselves in poverty by wasting their money, saving nothing, no investments and thus have a 'Living Wage' to get by but not to become wealthy.......
As Deborah has pointed out, i see students going on holidays, eating out, latest fashion etc etc, of course they can't save a deposit to buy, they are too busy enjoying themselves and displaying their poverty principles to ever own a home, t
let alone become wealthy......
These articles only ever 'scim' the surface of the reasons, go and sit in Costa and watch them spending £7 a head on cake n coffee....that's where your home deposits are!!

Rod

15:47 PM, 29th August 2017
About 2 years ago

Reply to the comment left by Mike D at 29/08/2017 - 13:53
SO, SO True! There's never a moment when I don't have problems with unpaid rent from a ertain category and I can guess where it all goes. I often write to the top people in government stating our case and if we all did it they'd soon get fed up! Give a little criticism back as people never like their own medicine! I generally state "I let out a unit for £85pw but after mortgage, expenses, tax etc I'm left with around £40 'so' it takes me a week to earn just £40 provided the rent's paid, welcome to the real world! Short, sharp, shock. So everyone get writing!! It would seem 'paying bills is so last year and out of fashion'!

Alison King

13:20 PM, 5th September 2017
About 2 years ago

I recently tried to persuade one of my tenants that she would be better off buying than renting. Her response; "no thanks, I don't want the responsibility".
Somebody has to own properties for people to rent.

terry sullivan

10:33 AM, 6th September 2017
About 2 years ago

Reply to the comment left by Gary Nock at 21/08/2017 - 17:22
there is no Conservative party now--all social democrats--big govt and high taxation--eu mentality basically

Jamie M

23:03 PM, 7th September 2017
About 2 years ago

Reply to the comment left by Gary Nock at 21/08/2017 - 17:22
Time to get Jacob Rees-Mogg into power

Whiteskifreak Surrey

9:04 AM, 8th September 2017
About 2 years ago

Reply to the comment left by J Moodie at 07/09/2017 - 23:03
All very well and I am not against him (even being a reluctant Remoaner), but how do we know he will support Home Providers and PRS in general? He is very rich, does not seem to be hands-on with a day to day life chores. Would he understand a concern of an ordinary Tenant and Landlord?

Jamie M

9:22 AM, 8th September 2017
About 2 years ago

Reply to the comment left by Whiteskifreak Surrey at 08/09/2017 - 09:04
Good question. I don't know yet and my feeling is having heard him comment on the bureaucratic nonsense that hampers small businesses that he will be an honest practical thinker re our and all issues. I will try to find out with Ros and her great S24 document and see if we can get him to read it.

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