Letter to Polly Toynbee

[james armstrong]

I have sent the letter below to Polly Toynbee.
a similar letter could act as a way of  spreading  the land and housing message.

Volunteers wanted to send it or an amended version in reply to 
misinfortmation as it comes up  in the  various media , parliament,authors of  books  etc when the oppotunity arises to about  the  housing crisis and the land monopoly.

Pse get in touch if you want to help.
Alternatively you may have an alternative message we can support and  put about.

James Armstrong, 22, Harveys Terrace, DORCHESTER, DT1 1LE.       
tel 01305 265510


To  M's Polly Toynbee

Dear Ms Toynbee,             "Better or Worse?"
There is a seminal article waiting to be written  on the people and 
companies  behind the housing crisis explaining the causes and proposing the solutions.

One thousand articles 'marvel' at  rising house prices. Hundreds of 
commentators  wonder  why new houses are not built to cash in on the boom.  
The key is to explain what are the identifiable, but not obvious causes and solutions to a crisis which is generally portrayed in the press as a circus.
Can my 1,500  words convince you  to write it?

To explain, you write "there was effectively no housing market"  
…(Better or Worse.)

Can I suggest you have 'hit the nail' but  missed the point (if that is possible).  Apart from anything else distorting a market is unlawful in EU and in UK -and potentially subject to unimaginable fines  for distorting this , the most £ valuable UK market.- house provision.  That is why we have the Competition Commission which has already imposed a fine of £17 million.- on a toy manufacturer- but  strangely not on those who distort the market for housing land.

The average daisy patch of grade A agricultural land large enough to put a house on is valued  at £175 until the day  it receives planning permission when it jumps in value  to £62,500 at the present recommended house building density.  (figures from Inland  Revenue and Halifax B.S.)
If a mortgage is taken out  to cover this , the  repayments  cost £133,000 over 25 years at 7.25% APR
This is for the land underneath the house only. Then the mortgage for the house and the builder's profit….
Is  there any doubt about the cause of the  house price inflation currently running at around 10% p.a.?

"But," you ask , " isn't the MPC of the Bank charged with keeping inflation at between 2% -3%, and hasn't the Governor just had to explain in writing, to the Chancellor, the reason for the rise over 3% ?"

Consider.    The measure of inflation used by the MPC is the 'Consumer Price Index' which omits  house prices.   Is this not strange when  such rises are the most visible  universal and most publicised instance of inflation?   
Sceptics  might  think that this anomaly shows  collusion between the Bank and the Treasury to divert attention  from the reasons why they welcome, (not abhor) inflation.
The Bank gets inflation by the back door, which stimulates the credit on which the High Street thrives and the banks  get their out-of-control credit card  interest and their outrageous mortgage interest, arrangement fees, cancellation fees, surveys…insurance…repossessions, 2nd mortgages ….These double as house prices double.. And the Governor of the Bank only has to write to the Treasury once every ten years!

     To reveal the causes it is necessary to expose the motives of the 
powerful entrenched corporate groups and even individuals  who stand to gain and so have distorted the market for their own ends.
The Chancellor trumpets 'Growth in the economy', at the heart of which is unsustainable and anti-social house price  inflation..    Landowners get windfall gains of £1.25million  per acre, just seven giant  corporate builders (unlawfully) monopolise  building land (see p 81 of the Barker Report)  and   houseowners  have to gear up their working lives to stay afloat.  Those in most need are penalised and  society's stress level rises.

With respect, the other point you have missed is that the market distortion is deliberate  City,- Bank-  Treasury- and corporate house builders'- POLICY.    The NFU and of course the CLBA and the CPRE and the NFB all combine to preserve the lucrative monopoly of land , and distract attention from the identifiable cause of the crisis by a plausible P.R. campaign, 'Britain is a small island' etc.  (significant land ownership monopoly in UK is worse than in Brazil)  It helps that the C.A.P. of the  E.U.  also inflates agricultural land values annually ,and  has done since 1973. The Treasury has nothing to do but keep quiet and disguise house-price inflation as 'growth'.

     I suggest you are wrong when you interpret   the role of the 
independent B.of E (Leave it to the Bankers)  You write, 'controlling house prices took precedence even over the cost of borrowing money for business investment',  (Better or Worse), If so  the Bank and the Treasury are abject failures  as house prices rocket!
They don’t fail- they have been highly successful !  They welcome the 
effects of high house prices. They see this as their unofficial aim. The Bank have no formal remit on house prices whatever.  I have a letter from Kate Barker  making that point when I accused the Bank of using house prices tangentially to stimulate growth. (I have quotes from Eddie George also).

  That is the point; no one has a remit to control or decrease house prices- the so called 'Affordable Houses' provision is a   laughably underfunded and wasteful  sticking plaster almost irrelevant to the (non)  market.
= buying land at inflated prices with taxpayers money & selling half-houses to the stigmatised  means-tested.

       In contrast  , the Bank monitors house prices obsessively, but not from concern but in order to simulate the 'beneficial' effects of moderate inflation, without having to acknowledge it.
House price inflation has the benefit of confining the inflation to the domestic market without affecting the value of the sterling exchange rate.
 
All UK houses are bought in UK!, with sterling!  The sterling crisis of the 1970's/80's was caused by 'general' inflation.  In 2007 we have Mark II inflation , now limited to the domestic market - the sophisticated (secret) tool of the Bank to get the benefit without the pain to industry, to exporters, to bankers or (apparently) to most  house owners (most of the time.)- but at the expense of honest government, unsustainability, and of  
those in housing stress,.

      "But" , you say, " since 70% of householders are home owners, is it not valid in a democracy, for the Chancellor to favour the majority and help increase the value of their homes?"
      Consider.   The above  is the 'democracy' of the Wild West where the more numerous , powerful and civilized Europeans  confiscated the land of the native Americans,  causing death and destruction in the process, and confined those  who  survived to 'Reservations.'  (Social housing !).  This is what Rousseau calls 'the tyranny of the majority.'  Similarly 'Enclosures' stimulated agriculture  but for some it caused homelessness and famine. Importantly,as in the housing crisis, the gains could be achieved by other methods.
There are areas of life, where universal , not majority, concerns are vital. 
Good and accessible  housing is an existential human  need, a universal concern not to be tailored to a majority  even a democratic one, nor to be misused by economists. In a welfare state the government's role is the interests of the most vulnerable.:
in a democratic state, it  is to represent the interests of all people: it is  to  protect  individuals' interests against those of commercial corporations who now have direct controlling influence, but no mere ' vote'.

    This '70%' argument   ignores the young people who have little prospect of becoming home owners. It  takes no account of the social cost of travelling, employment foregone, overcrowding , crime  and general stress which are the unmeasured costs of the crisis .

Conclusion 

There are known housing villains waiting to be exposed , there are specific causes to the housing crisis .  There are known solutions.
The sufferers are individuals in  stress of housing  who don’t know about political economy, nor can they be expected to identify the villains when press commentators and M.P's don’t  know or won't tell.
The solutions include prosecuting unlawful market distortion, making 
planning 'facilitating ' not restrictive, targeting planning to the house stressed not to the land rich, prioritising self build, using  laws for the  Compulsory Purchase of land for the house needy not as at present the Compulsory Purchase of old houses to boost the profits of the monopolist house-builders.  Those  who are democratically 
charged with looking after people's  interests are marching to a different drum, so there is need to safeguard the provision of housing to individuals and  to stop their exploitation by means of  land monopoly by incorporating 'protection of access to land' at the heart of the constitution. Only this can stop new variations on the  ages old theme of exploiting people's inescapable needs by monopolising land.

   The press itself benefits from raging house price mania. Even small 
regional local newspapers are funded by fat property supplements at £4,000 a page. Western morning news regularly carries 100 pages of property advertising.

     A little known phenomenon is that Self build housing  in UK , uniquely, is almost squeezed out of existence because building sites are only affordable to corporations  (they are usually for multiple units) and are bought  up to add to land banks for speculation - an effective padlock which closes the door to competition in the 'non' market..

     I contributed to the Barker Report, have correspondence from Kate Barker and the Competition Commission   (some of it is  amusing 'Yes Minister' stuff.)
Do you want to expose this gigantic scam and tell people for the first time the causes and the solutions to the housing crisis?    Yours faithfully,     
                           
James Armstrong,     Dorchester.   15th May 2007




House sales account for £3trillion  per annum.  And house prices have been increasing by 10% per annum.

There is a monopoly of ownership of building land and corporate 
institutions  including housebuilders, banks and mortgage lenders have an interest in continuing house  price inflation.
This analysis could give another meaning to Mervyn King's words to the 
Treasury Committee, "… inflation could fall sharply."

James Armstrong, 22, Harveys Terrace, DORCHESTER, DT1 1LE.       
tel 01305 265510




"Bank of England underestimates inflation threat."

Sir, The average daisy patch of grade A agricultural land large enough to put a house on is valued  £175 until the day  it receives planning 
permission when it jumps in value  to £62,500 at the present recommended house building density.

If a mortgage is taken out  to cover this , the  repayments  cost £133,000 over 25 years at 7.25% APR This is for the land underneath the house only.
House sales account for £3trillion  per annum.  And house prices have been increasing by 10% per annum.
There is a monopoly of ownership of building land  and corporate 
institutions  including housebuilders, banks and mortgage lenders have an interest in continuing house  price inflation.
This analysis could give another meaning to Mervyn King's words to the 
Treasury Committee,
"… inflation could fall sharply."


James Armstrong,  22,  Harveys Terrace, Dorchersterr DT1 1LE       
tel 01305 265510