[emn13]

The median UK salary is 30k pounds (https://www.gq-magazine.co.uk/article/average-uk-salary); it's higher in london, but I find differing numbers depending on where I look.

But in any case: Although house prices are a problem - and one UK politics feels uncomfortable addressing. You imply impure motives on the economists's side in that they're what exactly? In any case, it was the economist that suggested an annual tax based on property value, which would be a step towards a solution of that problem. But this is primarily a political problem. Extra taxes, particularly on something that is near to voters hearts and will hurt their investments, albeit in a bubble - those aren't an easy sell.

Still, while you're right that house prices are problematic, it's not reasonable to compare rising house prices to stagnant median incomes, and thus imply that housing is less affordable than previously: interest rates are extremely low, so the cost of housing is low too. The high price merely means the risk and reward of ownership is high; but low interest rate means that the amount of income you need to support a given price of housing is much lower than before. I'm not saying this is good or healthy or anything; it's just not so simple as that previously housing was affordable and now it's not.

Nor is the political problem of housing - which voters really have themselves to blame for, nobody else - any reason to ignore the employment boom. Not everything in the world is going great; what else is new? But we can still appreciate what is going well while acknowledging that other - distinct - problems exist.

[jdietrich]

>The high price merely means the risk and reward of ownership is high; but low interest rate means that the amount of income you need to support a given price of housing is much lower than before

Cheap repayments don't really influence affordability of ownership, because banks won't lend more than 3.5x income. If you're earning £30k and a house in your area costs £150k, you're stuck renting unless you can somehow save a £45k deposit.

Rents have been increasing faster than inflation for many years, which is a major problem if your income is barely keeping up with inflation.

[jajag]

The cost of housing is not low. For one thing, a lot of people can't get a mortgage due to deposit amounts being higher (because of higher house prices) and so are paying over the odds in overheated rental markets. On the other hand, those that can get a mortgage might be paying lower interest but they are still paying larger amounts overall because of the higher house cost.

[emn13]

Yeah, not disagreeing with there being a problem. Just saying that it's a little more complicated than "stagnant wages + rising prices = boom". Because it's nontrivial: what's the best fix? Does it render the jobs boom irrelevant?

[ivansavz]

> it was the economist that suggested an annual tax based on property value

Is this what you're referring to https://www.economist.com/leaders/2018/08/09/overhaul-tax-fo... ?

Very interesting idea, especially if implemented as a progressive tax. I wonder how that would work for corporations (e.g. landlord who owns the hundreds of apartments managed through a real estate corporation). Also why only property? Why should other assets like stock holdings be excluded?

[emn13]

That's a whole 'nother discussion; the point is simply that an ad hominem vs. the economist on this matter seem incongruous - and, more importantly, a distraction in poor form.

But I won't dispute that the idea seems applicable more broadly, especially since it's so much simpler and less fraud-sensitive than capital gains taxes. And while it's politically tricky, if implemented with a slow ramp up (i.e., don't do what Thatcher did) it probably won't hurt critical constituencies too bad. You could think of something like an X% tax of value above threshhold Y, and start with X low and Y high, and creep from there; e.g. X 1% and Y 500k pounds, conveniently hurting the rich not too much, and the bottom 50% of households even in london not at all. Even just the message that there's political will to do something about this would likely deflate the bubble a little.

[simonh]

The land property tax is intended to address specific issues with land value due to it's fixed availability and role in the economy. For example it's very hard to substitute unproductive land with something else, because you can't (to any significant degree) create new land, and certainly not with the same locational characteristics as existing land.

These aren't attributes shared by stocks or other financial assets. For example it's not straightforward to charge a rent on stocks, and they're not fungible to different economic uses in the same way land is.