Property, prices and value

I'm still wondering whether me and my wife will ever be able to afford our own house in the UK. If one is not already on the property ladder and have only a middling sort of income it seems hard to see how it can be done, especially when there are children to help through university. So I'm very open to reflecting with this article on the housing boom (and impending bust?) in the UK.

We do not get richer as a society from rising house prices. We merely transfer a burden to future generations who have to pay more for their houses. We shut out the have-nots who cannot tap their parents for a deposit. We lock in a permanent underclass who have no hope of ever getting on to the property ladder.

A fair analysis, it seems from where I sit. In fact the point gets sharper:

Need this have happened? No. Residential property in Britain jumped by £410bn in value last year. Only about 2% of that gain was taxed by stamp duty or inheritance tax. Would prices have risen so far so fast if land values were taxed more? No.

Not for the first time we come to consider a proposal that goes back nearly 150 years and has only now seemed to be gaining real consideration.

The discussion of land value tax, which has been around since the days of Adam Smith and David Ricardo, is gaining ground again as people reflect on the absurdities of the housing boom.

If you're interested to know more, then here's a good place to start. Here's a to-the-point nugget from it:

Land has a scarcity value when it is in desirable locations. That value is not down to individual effort but derives from the community, and often from schools, hospitals and parks provided by the public purse. Therefore, as the economist David Ricardo explained, land has a rental value that can be taxed.

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