Opposition grows to benefit cap

[Countdown]

RYH64E said:

Not maximising the sale price isn't the same as making a loss, plenty of private companies make good profits by doing this.

I don't agree with the policy of selling of council houses, cheap or otherwise, but I very much doubt that they were sold for a loss. If the money raised had been used to build new council houses I would have supported the project, and if they used the planning laws to free up cheap land they could probably have built more houses than they sold.

They were.

I think people are looking purely at the original "build" cost and comparing it with the "sales proceeds". This ignores the capital repairs / improvements as well as the financing costs.

[RYH64E]

Countdown said:

RYH64E said:

Not maximising the sale price isn't the same as making a loss, plenty of private companies make good profits by doing this.

I don't agree with the policy of selling of council houses, cheap or otherwise, but I very much doubt that they were sold for a loss. If the money raised had been used to build new council houses I would have supported the project, and if they used the planning laws to free up cheap land they could probably have built more houses than they sold.

They were.

I think people are looking purely at the original "build" cost and comparing it with the "sales proceeds". This ignores the capital repairs / improvements as well as the financing costs.

Profit/loss aren't subjective terms in the financial world, unless the houses were sold for less than their asset value they weren't sold at a loss. They may have been re-valued from the original build cost, but even then I doubt they were sold at a loss.

I'm in the process of selling an old company car, it cost £25k new in 2009, needed £2000 of repairs at it's last MOT (high pressure fuel pump and injectors), it's been depreciated through the books to about £3k, similar ones sell on Autotrader for about £5k, and I'll probably sell it for £4-£4.5k. Does that mean I've made a loss on it? No it doesn't, because a) it will sell for more than it's depreciated asset value, b) we've had good use out of it, and c) I can't be arsed trying to maximize it's sales price because I just want it gone. That's why car companies put trade-ins through the auctions, they're not making a loss by doing so just choosing not to maximise the potential sale price.

[Mrr T]

Gargamel said:

Mrr T said:

Why?

We have a finite amount of space, it is correct to prevent further urban sprawl, and destruction of the greenbelt. Once a "virgin" piece of land is built on, it will 99.9% of the time never go back to being open ground.

10million more people since 1964. Greater pressure on all infrastructure. Roads, Hospitals, Sewage, Water, Schools, Shops everything.

More people = more housing = more everything else. We cannot go to 80million people. Think how much better this country would be with a stable or slightly declining population.

See below.



Since 1964 the population of the UK has grown by over 10 million people (18.7%). About half of this growth has occurred since 2001.

Over the earlier part of this period population change was driven mainly by variation in the number of births. Population grew throughout the 1960s up until the early 1970s mainly as a result of the 1960s baby boom; while over the rest of the 1970s growth was subdued, reflecting falling fertility. The very large birth cohort of 1960s baby boomers beginning to have children saw births, and hence the population, grow again in the 1980s, but births declined again through the 1990s.

A time series of UK births and deaths data on a calendar year basis is available in the Population and Health Reference Tables published by ONS.

Since 2001 there have been high levels of net inward migration, adding to the population at younger working ages. In part this was driven by the expansion of the European Union in 2004 and 2007. This period has also seen an increasing number of births, driven by both the immigration of women of childbearing age (15-44) and rising fertility among UK-born women.

With regard to additional housing currently on the last figures Urban build in England is about 10% in Wales and NI about 4% and in Scotland about 1.5%. So we do have quite a lot of land available.

Your comments about population growth and immigration show you need to study the figures a lot more.

I will say the comments on the ONS web site on population growth are misleading. Quite poor for a statistical site.

The comments cover immigration and an increase in birth rates but there is a third and important factor.

If you look at Figure 2 and the graph of births exceeding deaths.

You might be mislead to believe we are having lots of babies.

However, if you look else where on the ONS site you will see births per head while they are rising from very low levels are still below population replacement level.

The growth is births over deaths is not about an increase in births but about longer life expectancy.

Since 1960 UK life expectancy has increased about 7 years,

This change in demographic has lead to about 30% of the population growth since 1960. Its also why immigration is so important to the UK.

You say a stable population, or even slightly declining would be ideal. This might be true if the demographics where not changing so fast.

Now unless you suggest we start culling older people a stable or declining population while life expectancy is rising is not an ideal its a recipe for disaster.

If you want to find out what it means for a country which has resisted immigration you only need to look at Japan.

Japan is a demographic nightmare. I believe some time in the next 10 years there will be more retired people then working.

[Countdown]

RYH64E said:

Profit/loss aren't subjective terms in the financial world,

I know. I'm a qualified accountant and I worked for a couple of years in Council Housing

RYH64E said:

unless the houses were sold for less than their asset value they weren't sold at a loss. They may have been re-valued from the original build cost, but even then I doubt they were sold at a loss.

They are sold at LESS than their value on the balance sheet. They are sold at less than "Historical Cost", "Current Cost", Net Realisable Value, or Value in Use. I think you may be assuming that "Historical Cost" only includes the original build cost, it doesn't. It needs to include the cost of any capital works as well as costs of financing.

RYH64E said:

I'm in the process of selling an old company car, it cost £25k new in 2009, needed £2000 of repairs at it's last MOT (high pressure fuel pump and injectors), it's been depreciated through the books to about £3k,

Cars usually depreciate. Houses usually appreciate.

[JagLover]

Mrr T said:

With regard to additional housing currently on the last figures Urban build in England is about 10% in Wales and NI about 4% and in Scotland about 1.5%. So we do have quite a lot of land available.

Since virtually all the immigrants come to England that is irrelevant. England has one of the highest population densities in the world, the fact there is plenty of space in the Scottish highlands is only of theoretical interest.

[Mrr T]

JagLover said:

Since virtually all the immigrants come to England that is irrelevant. England has one of the highest population densities in the world, the fact there is plenty of space in the Scottish highlands is only of theoretical interest.

The UK is actually only the 51st most densely populated country.

[Countdown]

Mrr T said:

The UK is actually only the 51st most densely populated country.

I stand to be corrected but I think that's because Scotland and Wales are pretty much empty

How does England on its own fare?

[Mrr T]

Countdown said:

Mrr T said:

The UK is actually only the 51st most densely populated country.

I stand to be corrected but I think that's because Scotland and Wales are pretty much empty

How does England on its own fare?

ONS quotes England population density at 413 per sq km so would be 31st in the world.

However, within England population density varies widely. London and its surrounds is a major world city and has high population densities which completely distort any average.

[davepoth]

Mrr T said:

Gargamel said:

JagLover said:

The country needs to build more housing full stop.

The Country needs less people, full stop.

Why?

Precisely. The country needs fewer people.

I digress. We need a certain number of working age people to prop up the "baby boomers" who are now all retiring - something like a ratio of 3:1 between working age people and dependents (children and retirees) is desirable, we have about 2:1.

So while certain parts of the UK are full (England, at 413 people per square kilometre, is more densely populated than the Netherlands or Japan)

http://www.ons.gov.uk/ons/guide-method/compendiums...

we do still need immigration to make sure that we can keep our pensioners fed and watered.

So there are two basic options. 1)Keep immigration, or 2)Send our OAPs elsewhere.

[Johnnytheboy]

Going back to the start of the thread:

"Opposition grows to benefit cap"

Has it?

My understanding is that this has been one of the coalition's most popular policies according to pollsters.

[RYH64E]

Countdown said:

They are sold at LESS than their value on the balance sheet. They are sold at less than "Historical Cost", "Current Cost", Net Realisable Value, or Value in Use. I think you may be assuming that "Historical Cost" only includes the original build cost, it doesn't. It needs to include the cost of any capital works as well as costs of financing.

I understand how it works, I just can't see how the value on the balance sheet could possibly be more than even a heavily discounted sales value based upon current market values. Even if you capitalise all of the improvements I don't see how you could possibly inflate the value of an asset purchased so long ago to anything like present sales values. Revalue certainly, but capitalise?

I may be wrong and I'm not an accountant, but I don't believe you can legitimately capitalise either repairs and maintenance or interest on debt, I've certainly never been allowed to do so and I capitalise everything I can. Those costs appear on the P&L not the Balance Sheet in my experience.

[JagLover]

Mrr T said:

ONS quotes England population density at 413 per sq km so would be 31st in the world.

England recently overtook the Netherlands to become the most densely populated major country in Europe.

Overall in Europe only Malta is more densely populated than England.

It is also rapidly rising expected to reach 419 per km in the near future and 494 by 2050

[Mrr T]

davepoth said:

So while certain parts of the UK are full (England, at 413 people per square kilometre, is more densely populated than the Netherlands or Japan)

davepoth said:

So while certain parts of the UK are full (England, at 413 people per square kilometre, is more densely populated than the Netherlands or Japan)

Which bit are full? I am also sure there are large areas which are not full.

As for you continuing to quote these statistics as if they mean some thing please stop. Population density is very complex.

For example Macu and HK are amongst the most densely populated countries in the world. However, even in Macu there are parts with low level buildings little different to a UK suburb, in HK visit the Big Budda and the cable car will cross miles of open country side with virtually no buildings.

You have quotes 2 countries Japan and Netherlands. If you look at Japan while Tokyo is more densely packed than London, Japan also has large parts of the islands which have population densities similar to northern Scotland. So comparing Japan to the England is perverse any comparison would have to be to the UK as a whole. Which makes Japan far more densely populated. The Netherlands are an even worst comparison. I believe the figures you quote are based on total area of the country. A quick glance at any map will show you Netherlands includes large areas of water. If you take this out the figure for populations density rises, according to wiki, from 409 to 497. So about 20% greater than the England.

[JagLover]

davepoth said:

Precisely. The country needs fewer people.

I digress. We need a certain number of working age people to prop up the "baby boomers" who are now all retiring - something like a ratio of 3:1 between working age people and dependents (children and retirees) is desirable, we have about 2:1.

So while certain parts of the UK are full (England, at 413 people per square kilometre, is more densely populated than the Netherlands or Japan)

http://www.ons.gov.uk/ons/guide-method/compendiums...

we do still need immigration to make sure that we can keep our pensioners fed and watered.

So there are two basic options. 1)Keep immigration, or 2)Send our OAPs elsewhere.

3m people are underemployed in the UK (I.E. they would like to work more hours but are unable to do so.)

An estimated third of those on incapacity benefit are capable of work.

I would suggest a third option would be to change the welfare system so that work always pays and to offer more training to get people into the most productive work. Continually packing more people into such a densely populated country is only going to continue the slow decline in real living standards of the last two decades.

[davepoth]

JagLover said:

3m people are underemployed in the UK (I.E. they would like to work more hours but are unable to do so.)

An estimated third of those on incapacity benefit are capable of work.

I would suggest a third option would be to change the welfare system so that work always pays and to offer more training to get people into the most productive work. Continually packing more people into such a densely populated country is only going to continue the slow decline in real living standards of the last two decades.

Which is exactly why I advocated deporting the pensioners.

[davepoth]

Mrr T said:

Which bit are full? I am also sure there are large areas which are not full.

As for you continuing to quote these statistics as if they mean some thing please stop. Population density is very complex.

Statistics can be used to tell the truth, or a bald-faced lie, or anything in between. I could tell you that the population density of London is 5285 people per square kilometre, but that's even less useful than the numbers we've given previously. You know as well as I do that to give an accurate picture you'd need to look at each square kilometre separately, which would be pointless. That's why we use averages.

It's important to understand that statistics will never be truly accurate, and need to be interpreted.

What I think it's fair to say is that England is more densely populated than the UK, and that England's population density is around about the population density of countries we'd consider very densely populated. In comparison to our nearest rival (France) for example, the UK has about the same population and around half the land area.

[Countdown]

RYH64E said:

I understand how it works, I just can't see how the value on the balance sheet could possibly be more than even a heavily discounted sales value based upon current market values. Even if you capitalise all of the improvements I don't see how you could possibly inflate the value of an asset purchased so long ago to anything like present sales values. Revalue certainly, but capitalise?

I'm a bit confused - revaluations are capitalised. So periodically what happens is a surveyor comes along and gives you a market value. You increase the value of your fixed assets on the balance sheet and the increase is credited to revaluation reserve. When these properties are sold the RTB discount starts at 35% and goes up to 70%. So, even using Historical Cost (plus any CapEx during ownership)the property is usually sold at a loss.

RYH64E said:

I may be wrong and I'm not an accountant, but I don't believe you can legitimately capitalise either repairs and maintenance or interest on debt, I've certainly never been allowed to do so and I capitalise everything I can. Those costs appear on the P&L not the Balance Sheet in my experience.

Apologies - ignore the interest/financing point - I was thinking about something completely different. R&M is capitalised where it enhances the value of an asset or significantly extends the life of an asset. For example replacing roofs, installing Double glazing, central heating, combi boilers, fire doors would all be considered CapEx.

[Kermit power]

Without reading through the whole thread, I just can't even begin to comprehend how anyone can think a £26k cap on benefits is anything other than far, far, far too high?

OK, so £26k is the average take home salary. To take home £26k, you basically need to earn £34k. That means it takes more than three average earners to keep one top level sponger household in benefits! How on earth is that supposed to be sustainable??

Far more reasonable, to my mind, would be to cap benefits at the average tax paid. That's arguably still far too high, but at least it would be a start!

From there, if people want more, then they can just go out and work. I'd even be generous and let them earn an extra £2k per annum on top of the £8k in benefits before starting to cut the benefits, and then - because my generosity knows no bounds - I'd remove just 50p of benefits per additional pound earned, so that they'd always be better off working than claiming benefits.

The flipside to this, however, is that if someone has been working and paying into the system then lost their job, I would allow them to claim 50% of their last year's salary for up to 5 years or until they had claimed back half of their lifetime tax contributions.

It really fks me off that I pay thousands in tax every year, in no small part to support scrounging scumbags, but because I've been prepared to work for a living, I'd probably lose my house if I was out of work for much more than a couple of months because I've actually had the temerity to get a mortgage!

[RYH64E]

Countdown said:

RYH64E said:

I understand how it works, I just can't see how the value on the balance sheet could possibly be more than even a heavily discounted sales value based upon current market values. Even if you capitalise all of the improvements I don't see how you could possibly inflate the value of an asset purchased so long ago to anything like present sales values. Revalue certainly, but capitalise?

I'm a bit confused - revaluations are capitalised. So periodically what happens is a surveyor comes along and gives you a market value. You increase the value of your fixed assets on the balance sheet and the increase is credited to revaluation reserve. When these properties are sold the RTB discount starts at 35% and goes up to 70%. So, even using Historical Cost (plus any CapEx during ownership)the property is usually sold at a loss.

RYH64E said:

I may be wrong and I'm not an accountant, but I don't believe you can legitimately capitalise either repairs and maintenance or interest on debt, I've certainly never been allowed to do so and I capitalise everything I can. Those costs appear on the P&L not the Balance Sheet in my experience.

Apologies - ignore the interest/financing point - I was thinking about something completely different. R&M is capitalised where it enhances the value of an asset or significantly extends the life of an asset. For example replacing roofs, installing Double glazing, central heating, combi boilers, fire doors would all be considered CapEx.

So now it makes sense. What you're actually saying is that the houses are re-valued to current market value and sold at a loss to that, which is hardly surprising really as they are discounted from current market value so by definition the revaluation reserve will take a hit. There's no way that there would be a loss if you only included purchase price (adjusted to 2015 values using rpi) plus any capital expenditure.

The revaluation reserve takes a hit, but as the revaluation reserve is only an accumulation of market price increases over the years and isn't based on any actual costs it doesn't represent a loss, just a reduction in the increase in value that would have been made if the houses were sold at full market value.

[nikaiyo2]

Countdown said:

RYH64E said:

I understand how it works, I just can't see how the value on the balance sheet could possibly be more than even a heavily discounted sales value based upon current market values. Even if you capitalise all of the improvements I don't see how you could possibly inflate the value of an asset purchased so long ago to anything like present sales values. Revalue certainly, but capitalise?

I'm a bit confused - revaluations are capitalised. So periodically what happens is a surveyor comes along and gives you a market value. You increase the value of your fixed assets on the balance sheet and the increase is credited to revaluation reserve. When these properties are sold the RTB discount starts at 35% and goes up to 70%. So, even using Historical Cost (plus any CapEx during ownership)the property is usually sold at a loss.

RYH64E said:

I may be wrong and I'm not an accountant, but I don't believe you can legitimately capitalise either repairs and maintenance or interest on debt, I've certainly never been allowed to do so and I capitalise everything I can. Those costs appear on the P&L not the Balance Sheet in my experience.

Apologies - ignore the interest/financing point - I was thinking about something completely different. R&M is capitalised where it enhances the value of an asset or significantly extends the life of an asset. For example replacing roofs, installing Double glazing, central heating, combi boilers, fire doors would all be considered CapEx.

So you agree almost ALL council housing was NOT sold at a loss, it was sold at a discount to market value, obviously as that was the point.

You make a point about improvements, but most of the improvements you list were done AFTER RTB, as the councils had money to do it... Most councils did not start double glazing till the early to mid 90's...