A Twitter thread on the main cause of inequality in the UK is below. This cause is …
The increase in property wealth of the rich and affluent.
- 1. Wealth in Europe is 50% housing wealth: Wealth in all buildings is more than 50%.
- 2. The value of the actual buildings is small compared to the land they stand on.
- 3. 50% of the wealth in the UK is the right to have buildings on land.
- 4. Planning restrictions on building keep the value of these “rights” high.
- 5. The planning system is the major cause of inequality in the UK.
Share of wealth by category (housing, pensions, other)
The value of buildings & land
2) The value of the buildings is small compared to the value of the land they stand on.— Geoff Beacon (@GeoffBeacon) December 24, 2021
The value of this land is mostly determined by the rights to have buildings on the land. (This is a generalisation of planning permission.)
50% of the wealth of the UK is the right to have buildings on land
4) Restrictions on building through the planning system keeps places to build in short supply so e.g…— Geoff Beacon (@GeoffBeacon) December 24, 2021
A plot of agricultural land in York worth £600 increases its value to about £200,000 when planning permission is granted, enriching the land owner.
So house prices rise.
Where are the economists to comment on this inequality?
6/6) What do economists say about this?— Geoff Beacon (@GeoffBeacon) December 24, 2021
e.g. Does Daniel Wadenstrom look for causes (like the planning system) of the changes he identifies?
When will any understanding of this process get into political discussion?
It is a major cause of inequality.
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