Asset inflation

Assets - like my house and other things I've got - inflate, but my house has inflated more than anything else, and I don't like that because it means that it's too expensive for most people to afford. This situation is fine for the middle-aged people who already have homes, but tough on the younger ones. With easier access to mortgages than we used to have, and with two incomes counting towards mortgages instead of several multiples of the husband's salary and a fraction of the wife's, people get loaned more money, so can offer more money. Consequently, small houses perhaps have inflated even more than big houses, so people who can't afford very much find it even more difficult to get on the housing ladder.

The Telegraph has a campaign against the governments proposal to increase capital gains tax on second homes, because lots of people would flood the market with their buy-to-let properties and this would damage the property market, which is just recovering, that is, prices are going up again.

Now who benefits from house prices going up? Not me, and not the house owner who if buying another house just has to find more money.

• The government benefits from more frequent stamp duty.
  
• Surveyors benefit from the extra work each time a house is checked.
  
• Estate agents take a percentage of each sale.

This churn benefits those who get a cut of the changing houses, and house price inflation means they get a bigger cut, but it doesn't benefit people who aren't buying and selling or involved in this chain of business. In fact, it works to the detriment of young people who find small houses too expensive to buy. So a cut in CGT that causes a flood of houses on the market, might also help reduce the housing market, and house (i.e asset) inflation.

I can hear the surveyors and estate agents and the The Telegraph complaining that lots of jobs would be lost. But so what? What jobs are these? They don't bring money into the country, but just move money from one place to another within the country. So they don't increase the economy, (though the extra stamp duty paid will help to reduce the government debt).

So I want this CGT increase because it seems like its consequences will be a good thing for wider society, like bring down house price inflation so our children can afford houses again.

Paying for university

I thought it was bad enough that the government gave so few years warning that my children would have to pay to go to university. I don't see it as unfair to have to pay, but would have liked to have known when they were much younger. Son is now building up his debt, having a living expenses loan of £3000 a year, and £3000 a year paid to the university. So that's a lot at the end of a four year course.

He applied to five universities, and now his sister is going through the UCAS process and applying to study maths at Oxford, Bristol, Bath, Warwick and Surrey. Their aunt in the states has just emailed to ask

"Do you have to pay to apply to universities in Britain? (Son) paid about $300.00 per application."

Thank goodness that's one expense that we don't have to pay yet.

Daughter has an interview at Surrey next week, an acknowledgement from Bristol and Oxford, but not yet Warwick and the offer of an interview at Bath in January.