[BBC News] Housing 'milestone' voted through

[Albert Tatlock]

Like £6000 will not be worth £6000 in 2016, 6000 houses will not be 6000 houses by 2016.

 

Every 10 years the proportion of the population aged over 65 (around 15,000 at present) is increasing by 5%. People over 65 tend to be couples or surviving spouses - not families. This means that a great many houses that otherwise would have been 'freed up' will not be. Add to that more people coming here to retire to avoid inheritance tax (and living longer) and the picture becomes far worse, especially as many of those retring will come here at age 60/65 tieing up housing stock for 20 - 30 years. As the population ages, then we are likely to end up with a large proportion of our 'family' housing stock occupied by married/single people over 65 i.e. 1.0 or 2.0 families v 2.0 adults and 2.4 children etc.

 

Approximately 16,000 people aged 0-19 yrs (8000 couples) in the 2001 census will be looking to buy or have bought by 2016 - and have their 2.4 children - in single, married, or partnerships etc. Now it might be the case that many of these people will leave the island, but remember that they are being replaced by people of similar ages, plus others, as the population is still growing by 1000 a year. Also we are trying to expand the economy by attracting businesses and, generally, people in their 20s to 40s (in order to support an aging population too!) who tend to have or want to have 2.4 children (in other words realitically increase the population by 1200/1500 a year). You can only expand the economy by productivity or reproductivity. In addition this year has seen the lowest amount of marriages, a high number of divorces, which means even more future single occupancies - and paints a more complex future picture, as I suspect marriages will still drop, and divorces increase or stay the same over the next 10 years - but that the birth rate will not drop substantially and there will be a need for more family and single homes (e.g. with room for the kids from any divorced relationship(s) to stay over).

 

The breakdown of the current population increase of 1000 people a year is critical to understanding future housing needs. What the expansion of the economy means in terms of population increase over the next 10 years needs to be addressed and clarified.

 

If the population is increasing by a 1000 a year (a likely minimum increase of 10,000 by 2016), then if people are living longer and tying up family homes, if the recent estimate of 500 people deemed 'homeless' or in 'housing difficulty' is correct, as society is changing, and we want to expand the economy - then IMO we are fast heading for a housing crisis and the calculations are flawed - and I think they should revise this 6000 homes upwards of 2000 to 3000 homes - or at least publish how they have calculated this figure of 6000 homes and debate the data on which it is based.

[ai_Droid]

Don't forget that this is 6,000 houses above and beyond the normal developments that happen in the private sector.

[BigDave]

The private sector have valid planning approval but have market control by choosing not to build them.

Actually in most cases they have other projects running and don't want to overcommit their resources, or buy the land to ensure the long term profitability of their business. They also understand that there's only so many houses you can sell in a certain time - if they build them and can't sell them it costs them money. It's got nothing to do with market control.

[Albert Tatlock]

Don't forget that this is 6,000 houses above and beyond the normal developments that happen in the private sector.

Are you aware that the population of the island aged 65 or over has increased by 6000 between 2001 and 2006? 13,237 in 2006 versus 7419 in 2001.

 

Until we analyse a realistic figure, understand just how much more land is required to be released to accomodate this number of homes and ensure this land is released, and encourage private developers to not hold back for reasons of artificially inflating prices - things will only get worse. Current volumes are only likely to cover demographic changes, never mind economic expansion, and only economic expansion will allow workers to arrive to support an additional 6000 people aged 65+. If the number of private developments are not monitored and maintained (by adjusting the 6000 figure when required) we will end up with a shortfall. Clearly demand is currently outstripping supply, and there seems to be a general policy to maintain this status quo until at least 2016 - but at what cost to those who will be in their 30s by then?

 

Wages are not keeping up with current house inflation, and the only people able to afford many houses these days are those coming over from the UK (many of whom are older or retired), disadvantaging many young locals. My main concern is that if we are not careful, we will end up with a disporportionate ratio of older/elderly people to young working people - as many younger people/couples simply cannot afford to stay, or will be unwilling to pay such high prices. The higher the older:younger ratio during any downturn in the economy, the worse the downturn will be - as we will still be expected to provide the health/care infrastructure at crippling costs.

 

We have to consider all future possibilities and take a closer look at what's actually happening here.

[ai_Droid]

Are you aware that the population of the island aged 65 or over has increased by 6000 between 2001 and 2006? 13,237 in 2006 versus 7419 in 2001.

 

I'm not disagreeing that it's a serious problem Albert, but that the development of houses isn't necessarily limited to the 6000 mentioned in the strategic plan.

 

Until we analyse a realistic figure, understand just how much more land is required to be released to accomodate this number of homes and ensure this land is released, and encourage private developers to not hold back for reasons of artificially inflating prices - things will only get worse.

 

It's pretty complex though, isn't it? You have to have landowners who want to develop, residents who aren't NIMBY, investment in infrastructure to bring services to new locations, etc etc. It's a serious challenge.

 

Wages are not keeping up with current house inflation, and the only people able to afford many houses these days are those coming over from the UK (many of whom are older or retired), disadvantaging many young locals. My main concern is that if we are not careful, we will end up with a disporportionate ratio of older/elderly people to young working people - as many younger people/couples simply cannot afford to stay, or will be unwilling to pay such high prices. The higher the older:younger ratio during any downturn in the economy, the worse the downturn will be - as we will still be expected to provide the health/care infrastructure at crippling costs.

 

We have a disproportionate ratio of working population already, but we get away with it because our retired population are, in the main, wealthy. That's why they're here.

[Albert Tatlock]

We have a disproportionate ratio of working population already, but we get away with it because our retired population are, in the main, wealthy. That's why they're here.

But they pay little tax and no inheritance tax, and often their investment will dissapear off the island (to relatives) when they do. At current interest rates etc. to pay the same amount of tax as a working person requires someone to have around a £800K to a £million pounds in the bank, as it is only the interest that will be taxed. You don't pay interest or tax on property you've bought outright.

 

Are you really saying that 6000 millionaires have arrived on the island in 5 years? I think not. And in the meantime 6000 people 65+ has a major effect on our infrastructure - hence the number arriving should be limited. And don't say these people are out spending because they are not...the Old Mills tea-room has been very quiet again this week.

[ai_Droid]

But they pay little tax and no inheritance tax, and often their investment will dissapear off the island (to relatives) when they do. At current interest rates etc. to pay the same amount of tax as a working person requires someone to have around a £800K to a £million pounds in the bank, as it is only the interest that will be taxed. You don't pay interest or tax on property you've bought outright.

 

The IOM runs primarily on a system of indirect taxation, we have relatively low income tax. Most of our governments revenue comes from VAT, fuel, booze and tobacco tax, not income tax or tax on interest. A person retiring here will pay a large stamp duty on that big house they've bought, spend a shedload on VAT and get taxed on all the fags and booze they swill.

 

Interest saves tax, so not sure what you mean by buying outright. Buying outright means you'll pay more tax, not less because you won't gain the allowance from that interest.

 

Are you really saying that 6000 millionaires have arrived on the island in 5 years? I think not. And in the meantime 6000 people 65+ has a major effect on our infrastructure - hence the number arriving should be limited. And don't say these people are out spending because they are not...the Old Mills tea-room has been very quiet again this week.

 

No, I'm not saying anything other than our population is skewed over the UK average to an older, more affluent, non working portion of the population.

[Albert Tatlock]

The IOM runs primarily on a system of indirect taxation, we have relatively low income tax. Most of our governments revenue comes from VAT, fuel, booze and tobacco tax, not income tax or tax on interest. A person retiring here will pay a large stamp duty on that big house they've bought, spend a shedload on VAT and get taxed on all the fags and booze they swill.

 

Interest saves tax, so not sure what you mean by buying outright. Buying outright means you'll pay more tax, not less because you won't gain the allowance from that interest.

I don't see many 65+ beer swilling, fag smoking, 'driving miles each week' pensioners on the rampage...and are you really telling me that if I invested £200K in a house that is rising by 11% a year I'd be better of getting a loan so I can claim tax back on the high interest I'd pay - whilst getting sod all interest by investing the money instead at 6%? Other than bets on equity - who gives mortages to 75 year olds anyway?

 

I think you'll find it's mainly the working 16 to 50 year olds that are paying the £400m VAT and £100M personal income tax bills. They are the ones out working and buying things. Most 'rich' pensioners have been there and done all that, and those relying on a state pension can't afford to do it.

 

You're living in dreamland.

[ai_Droid]

I don't see many 65+ beer swilling, fag smoking, 'driving miles each week' pensioners on the rampage...

 

Albert, I don't give a shite what you see. What matters is reality, and the reality is that indirect taxation creates most of the revenue of our government. So bleating about how income tax of retiree's doesn't make em worthwhile is missing the point.

 

and are you really telling me that if I invested £200K in a house that is rising by 11% a year I'd be better of getting a loan so I can claim tax back on the high interest I'd pay - whilst getting sod all interest by investing the money instead at 6%? Other than bets on equity - who gives mortages to 75 year olds anyway?

 

I'm saying that you SAVE tax by having interest. So in a discussion about government tax revenues, you said that somone who buys a house outright generates less tax for the goverment. That's incorret. Paying interest means you pay less tax.

 

Earning interest does pay tax, so the retiree who comes over and puts a stash in the bank also earns more tax than you're family guy who blows all his dosh on a tax deductable mortgage, see?

 

I think you'll find it's mainly the working 16 to 50 year olds that are paying the £400m VAT and £100M personal income tax bills. They are the ones out working and buying things. Most 'rich' pensioners have been there and done all that, and those relying on a state pension can't afford to do it.

You're living in dreamland.

 

Albert, you're simply making this up, now. Everyone must pay VAT, there's no avoiding it. Those retired folks are buying cars, clothes, fuel, double glazing, whatever. They're generating VAT payments. You get far more VAT from selling a new micra to an old couple than an Ipod to a teen.

[Albert Tatlock]

I don't see many 65+ beer swilling, fag smoking, 'driving miles each week' pensioners on the rampage...

 

Albert, I don't give a shite what you see. What matters is reality, and the reality is that indirect taxation creates most of the revenue of our government. So bleating about how income tax of retiree's doesn't make em worthwhile is missing the point.

 

and are you really telling me that if I invested £200K in a house that is rising by 11% a year I'd be better of getting a loan so I can claim tax back on the high interest I'd pay - whilst getting sod all interest by investing the money instead at 6%? Other than bets on equity - who gives mortages to 75 year olds anyway?

 

I'm saying that you SAVE tax by having interest. So in a discussion about government tax revenues, you said that somone who buys a house outright generates less tax for the goverment. That's incorret. Paying interest means you pay less tax.

 

Earning interest does pay tax, so the retiree who comes over and puts a stash in the bank also earns more tax than you're family guy who blows all his dosh on a tax deductable mortgage, see?

 

I think you'll find it's mainly the working 16 to 50 year olds that are paying the £400m VAT and £100M personal income tax bills. They are the ones out working and buying things. Most 'rich' pensioners have been there and done all that, and those relying on a state pension can't afford to do it.

You're living in dreamland.

 

Albert, you're simply making this up, now. Everyone must pay VAT, there's no avoiding it. Those retired folks are buying cars, clothes, fuel, double glazing, whatever. They're generating VAT payments. You get far more VAT from selling a new micra to an old couple than an Ipod to a teen.

I stand by what I said.

[thebees]

Albert is ALWAYS right Droid, what do you know anyway? all your intelligence is artificial

[ai_Droid]

I stand by what I said.

 

What, that paying interest somehow generates more tax? Why don't you explain that to me?

 

Just checked the UK national statistics, in 2004 the average retired non-state dependant household spends £203 a week compared to £280 a week for non-retired. If you consider that our retiree comovers are going to be at the more affluent end of that average if the'yre escaping tax, they compare pretty well. Retired people spend and earn us VAT, there's no argument.

 

Take a wander up B&Q on over 65 discount day, or the garden centres for that matter..

[Albert Tatlock]

I stand by what I said.

 

What, that paying interest somehow generates more tax? Why don't you explain that to me?

Read my posts - I said no such thing.

 

...and how much is spent on pensioners in health/care costs compared to your average family?

[hope]

The comfortable retiree spends more per capita than any other social group- start up service enterprise and get some of that money, as for the lack of affordable housing that is a really serious matter; I'm alright Jack, but my heart goes out to the youngsters who can't even get started, I think self build communities are a possible way forward -local authorities should grant special PP for such enterprise, it's something a group of like minded individuals could get together over- and lobby the higher ups about allocating some of that house building land for this enterprise, don't just whinge , do something!

[ai_Droid]

Read my posts - I said no such thing.

 

You said "You don't pay interest or tax on property you've bought outright" in your argument to say to how someone coming over to retire would pay less tax. You do pay tax on a property you've bought outright, you pay a stamp duty. You don't pay tax on interest you're borrowing. So how do you explain your assertion that someone buying a house without a mortgage pays less tax. Explain it to me.

 

...and how much is spent on pensioners in health/care costs compared to your average family?

 

If we're talking specifically about wealthy people retiring here, their healthcare will be well and truly paid for, either by their existing contributions which transfer in, or by private healthcare.