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As opposed to the traditional Estate Agent (Realtor) which facilitates (or not) a transaction between two people, this would be a business which, when you wanted to sell your house, would buy it from you, and when you wanted to buy a house, would sell you one of the ones it owned.
This would add a
lot of convenience for individuals buying and selling houses - at some additional cost. The Estate Agent would have to factor into the selling price (or, more accurately, the difference between the amounts it buys and sells houses for) the cost of its capital tied up in the house over the period when it owns the house (or the costs of maintaining the mortgage), and an amount of insurance against swings in the housing market. The individual buying a house would have the assurance that there's no 'chain' of sellers which could collapse and that they can determine the completion date.
One major issue with this idea in the UK housing market is Stamp Duty (a special, extra tax on buying property), which means that when you buy a £500000 house, you've got to come up with an extra £20000. To avoid this being charged twice, this business should be run by the Church of England as a loophole in the law is that you don't pay Stamp Duty if you buy a property from the Church. Other advantages are that the Church already has a vast portfolio of property in the UK, some of which it could use to kick-start this operation, and probably has a bit of spare capital for start-up funding too. Oh yes, and vicars have a lot of spare time during the week.
UK House Prices
http://www.hbosplc....pricecalculator.asp
[hippo, Oct 04 2004, last modified Oct 21 2004]
arizona home prices
http://www.homeaz.net
Compare Arizona home values [mickey, Oct 19 2005]
House price calculator
http://www.hbosplc....pricecalculator.asp
(Replacement for [hippo]'s link, now broken.) [angel, Oct 19 2005]
[link]
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I had a conversation about this, not two months ago with a property lawyer friend. The idea was eventually rejected on the grounds of double stamp duty. Congratulations on finding the loophole. |
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<Rant alert> Anything that kicks estate agents in the teeth is OK with me, double-dealing money-grabbing inflation-causing greed-crazed half wits<rant over>. |
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How long do you think it would be before the loophole was closed? Still, croissant for providing a much-needed service to the public and revenue for the Church. Although with the CofE's record on investment management, the bubble will burst just as they've got their portfolio at maximum. |
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No stamp duty is payable on properties that cost less than £60,000, so this would be workable as a niche system for cheap houses, even without the Reverend Green. |
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Question:
Does this loophole apply in Scotland with the Episcopalians? |
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Problems:
1. While the Church owns the property, it would assume all the risks associated with ownership, which no-one wants.
2. Will this not mean that there is twice the amount of conveyancing work to be done? That'll cost yer a bit, so it might not be worth your while, in terms of the financial advantage of evading stamp duty. |
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All in all, though, croissant. |
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[mfy] it would to be some pretty complex conveyancing to come anywhere near the cost of Stamp Duty. As I understand it, the point is to have a stock of ready-to-buy housing, Stamp Duty is merely an obstacle to be negotiated in implementing the idea. |
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This would suit a friend of mine, who has the chance to buy an excellent property at below market price, but can't get an offer accepted until his own flat is under offer. Collapsing chains are The Major Headache in buying and selling, and each year cost the general public millions in lost fees. |
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[egbert], it would have to be some complex conveyancing but if the house you were buying cost just a shade over £60k, it might still negate the saving (which is what my original annotation should have said but didn't because of a reason). |
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Leaving aside the property the CofE already owns, acquiring the stock of housing will necessarily involve some conveyancing costs, which I suspect that the church would be unwilling to bear. |
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This idea is U.K. - only? Because in the U.S., we have management companies that buy and sell properties and no equivalent of Stamp Duty, to my knowledge. |
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That Stamp duty thing seems nasty... you ought to get rid of that. |
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What is it about British stamp laws that always puts them at the center of controversy every few hundred years? |
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[snarfyguy] Do these management companies actually buy the properties on their own behalf, and then resell them?
[UB] Yes - and looking at the rise in house prices over the last 10 years (160% price *increase* in London - see link), it's now a big earner for the UK Government.
The Stamp Duty bit and the Church dodge are not really necessary to this idea - they're just there to make it work in the UK. The main bit is the convenience of being able to select from a range of immediately available properties, and there being no 'chains'. |
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Does the catchphrase "irrational exuberance" ring a bell with you, [UB]? Might want to hedge your investments. |
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You had me right alongside you there, [hippo], until //Oh yes, and vicars have a lot of spare time during the week.// My brother-in-law is a vicar with the smallest parish (in area) in London. He works non-stop from Tuesday through to Sunday looking after his congregation of 900 (congregation mind, not parishioners, he probably only has 6 parishioners!).
So + for the idea, but - for the anti-vicar bias. |
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Oh, and [UB], isn't that because Aussies are buying up property as investment for their old age because they don't trust the pensions companies any more? |
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how come he has a huge congregation and a handful of parishioners ? |
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To build up a good range of houses to choose from you'd have to have a pretty extensive organisation of professional buyers covering the whole country. The cost of Stamp Duty would probably be a minor inconvenience by comparison. |
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[po] - I exaggerate somewhat - he probably has a few hundred parishioners. His parish is defined as a block of flats in central London. However, a huge number of people travel from all over London to go to the church of which he happens to be vicar. Just successful I guess! |
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Interesting, but there are plenty of companies, funds, and individuals that buy and sell property for a profit like any other asset. They might buy your house, if they think it will appreciate quickly. They'll happily sell to individuals, but I don't see why a buyer would want to limit themselves to properties owned by one company (it's not like buying milk at a convenience store when it's worth it to pay a bit more and forego a wider selection; it's decades of debt-bondage -- shop around). |
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(Higher taxes on investment properties is more than a naked cash grab: It discourages speculation, holding down housing market inflation and, ideally, saving houses for people who want to actually live in them and properties for those who might actually put them to productive use.) |
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Using religious organizations as tax dodges isn't really new. You probably wouldn't get away with it these days, but who knows? |
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Yeah, they're not brokers, [hippo]; they get together lots of capital and buy & sell commercial and residential properties. Very common over here... |
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//this business should be run by the Church of England as a loophole in the law is that you don't pay Stamp Duty if you buy a property from the Church// |
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Is the Church loophole only open to the Church of England? E.g. Could I establish a Temple of the FloridaManatee, believers: 1? Otherwise, can I buy a stake in the Church of England? |
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You can still buy a house here for £60k? |
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"Only if the property was next to the Neighbours From Hell." |
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I live across from them. My house number is 667 (the Neighbor of the Beast) |
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In Sydney there are companies who do exactly this; they have "Houses bought for Cash" signs all over the western suburbs. |
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