The Truth About Property (BBC2)

I watched this, expecting to be able to revel in sixty minutes of house-price-crash-porn.

It was actually far more thoughtful than that. In summary, the way the property market in the UK has worked since the mid-nineties is to transfer wealth from young, asset-poor, hard-working people to older, asset-rich people, in particular landlords(1) and retired people(2).

And of course, now that prices have started falling again, it will fuck things up for everybody(3).

Given that there are really only three kinds of taxes - sin taxes; income/turnover/profit taxes; and property value taxes - it strikes me that we in the UK have got the balance wrong(4).

Couldn't we, er, try reducing taxes on income/turnover/profits and increase them a little on property values, to ensure some sort of equity between generations? Aren't we all young and poor and energetic when we start off, maybe with young children?

(1) Including Your Truly, of course, but that's another story.

(2) State pensions are paid for out of taxes on the working population, private pensions are funded out of dividends that ultimately are derived from the efforts of the working population, above and beyond the investment risk that shareholders bear. And many of those will have bought their homes for a few thousand pounds at low-points of the 18-year property price cycle in the mid 1960s or early 1980s.

(3) Because the flip-side of the house-price bubble is of course the credit bubble. Those who have banked their ill-gotten property gains and put the money into cash or shares, now have to worry about whether there'll be a run on their bank or whether the companies they've invested in get caught in the credit-squeeze. Including Yours Truly, of course.

(4) Yes, government spending and taxes are far too high, yawn, probably by about £100 billion per annum, that's a whole 'nother topic.