Debate Magazine

Only One-in-three? That's a Bit Worrying.

Posted on the 22 July 2015 by Markwadsworth @Mark_Wadsworth

From The Daily Mail:
More than one in three homes will be owned outright within a decade, as baby boomers pay off their mortgages, a new report reveals. By 2025, 10.6million families will be living mortgage free, up from 8.4million today, most of them in their sixties and seventies.
But millions of younger people will never get on the property ladder as analysis shows there will be more people will be forced to rent privately than paying off a mortgage within a decade.

I'm a bit baffled why people who bought more than 15 years ago haven't paid off their mortgages yet; (I bought in 1998 and it took me ten years, so I am already one of the lucky one-in-three.)
The graph also highlights just how unequal land ownership (as extrapolated from home-ownership figures) will be if their 2025 forecasts are correct:
* 16% of households (social tenants) will be paying enough rent to cover running costs, but little or nothing for the land. They are in a break-even.
* 24% of households will be private tenants who own no land and have to pay full market rent for the privilege of living.
* 24% of households will be mortgage payers; about half of these will own no 'land' i.e. the outstanding mortgage will exceed the value of the land under their house (as distinct from the house on it).
* 34% will own their homes outright.
Those 24% private renters will be renting from 4% of households and presumably these 4% households also own their own homes, so on average, they own about seven homes each. For sure, there is some borrowing secured against this, let's call it four units of land each.
So there we have it:
* The bottom 52% own no land.
* 12% own some land (but less than one unit)
* 34% own one unit of land.
* The top 4% own four units each.
So the time honoured KLN "Land Value Tax would be regressive" is complete and utter horseshit. Imposing LVT in itself would level the land monopoly playing field; and it can't be rocket science to use the proceeds to replace the most regressive/economically damaging taxes. A more equal society with "hard working people" keeping more of their earned income. What's not to like?

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