What caught my eye this week.
I can’t get very het up about housing secretary Angela Rayner’s resignation [1] on Friday, as a result of her underpaying stamp duty on a flat in Hove.
For starters, it’s pretty clear that Rayner is just the latest person to run into the buzzsaw of Britain’s ludicrously complicated tax code – even with professional help in her case – and to come out supremely chaffed by the contact.
Nothing in this sad story involving divorce, a disabled child, and divided duties across the country has the hallmarks of a grand conspiracy to dupe the taxpayer.
All the same, as a leading minister she should have got it right and she didn’t.
And honestly, after the past few years it’s refreshing to see an MP resigning in good time, rather than having to be burned out of office like a recalcitrant tumour.
This is the way our knockabout democracy used to work.
Snagging issues
Perhaps as housing secretary she should have gone anyway, given Labour’s dismal showing to-date in homebuilding.
True, the creation [2] of the Building Safety Regulator in 2022 long predates Rayner’s taking on the housing brief.
But industry voices have been warning for years that the new body was underfunded and that this was severely delaying [3] development.
The construction sector is running at levels last seen during the pandemic – you know, when most of us weren’t even allowed out of the house. According [4] to homebuilder Berkeley, new home starts in London are as low as in the aftermath of the financial crisis.
Sure I’m gloomy [5] about the UK economy, but even I think it should be a better time to be building houses than during a plague or a potential depression.
Rayner must have seen similar numbers crossing her desk. I didn’t notice any urgency in response. Perhaps the next one can do better.
Homebuyer’s report
It’s notable that it’s a housing-related scandal that’s delivered this speedy resignation.
Would Rayner have faced quite the same opprobrium if she’d made a mistake on her self-assessment tax form?
Possibly not.
It’s an interesting coincidence too that Trump is currently pressuring the still-independent US Federal Reserve by firing a Fed committee member over alleged [6] mortgage fraud.
Of course this is just the latest in his ongoing belittlement of the US institutional framework. He might have fired her for being late returning her library books if that was all his people dug up.
But mortgage fraud hits the sweet spot.
Indeed given how politically hot this potato is in the US and UK, I was surprised to also read a story in The Guardian [7] this week that detailed the property holdings of Australian politicians.
Out of the 236 federal Australian MPs and senators who’ve disclosed their housing interests, more than half – 130 – have multiple homes, investment properties, or both.
Some have six properties! (Some have cattle ranches, but we’ll put that to one side. Fair dinkum mate.)
Australia is a vast country, and there’s lots of room for more homes. Though most of that room is in a desert and Australia has its own housing affordability crisis [8].
How are the Aussie lawmakers getting away with their side hustles as property tycoons? It must come down to cultural norms.
In her recent FIRE-side chat [9], Melbourne-based Monevator reader London a Long Time Ago told us how everyone with any money in Australia does property like we do ISAs.
I suppose that keeps any stone throwing through glasshouse windows to a minimum.
Fixer-upper
Will Rachel Reeves still go after stamp duty and other property taxes in the November Budget, given her own colleague just blew up on contact with this touchy subject?
The chancellor could spin it either way – as yet another pointer that complex property taxes are overdue reform, or as deciding to avoid complicating the situation even further given those infamously hard-working families already have enough on their plate.
Reeves should at least scotch the rumours pronto if there’s nothing doing. The uncertainty [10] is slowing down the housing market, and the UK (and Treasury) needs all the economic growth it can get.
As for building more homes, an interesting article behind the paywall in the Financial Times [11] this week makes the case that supply isn’t actually the problem many of us think it is. It even advocates for a wealth tax on land as a salve to a distorted market.
Personally, while I think stamp duty is a dysfunctional tax that desperately needs reform and that something must be done to slow the UK’s descent into neo-feudalism, the reality is an Englishman or woman’s home is their castle – one with barrels of explosive gunpowder in the basement.
If Reeves wants to follow Rayner out in a blaze of glory, then she only needs to light the fuse…
Have a great weekend!
From Monevator
When are fund fees low enough? – Monevator [12]
Retail bonds: Rare, risky, and sometimes rewarding – Monevator [13]
From the archive-ator: It’s survival of the fittest with ESG returns – Monevator [14]
News
Rachel Reeves sets Budget date for 26 November… – UK Gov [15]
…and the rumour mill has put plenty on the table… – Which [16]
…prompting savers to pull tax-free cash from pensions again – This Is Money [17]
Former footballers lost millions in investments – BBC [18]
Gold price hits record high – BBC [19]
UK fintech pioneers unite to build bank for high-net worths – Finextra [20]
Average UK house costs a record £299,331, says Halifax… – Guardian [21]
…though Nationwide says they fell – This Is Money [22]
Google’s parent soars as court rules it doesn’t have to sell Chrome – Sherwood [23]
High-frequency trading intern wanted. Monthly salary $35,000 – FT [24]
Bitcoin treasury companies collectively own over one million BTC – The Block [25]
The US population could actually shrink in 2025 – Derek Thompson [26]
Products and services
Households urged to lock down new mortgage deals now – This Is Money [27]
The death of the wallet – Guardian [28]
Get up to £1,500 cashback when you transfer your cash and/or investments to Charles Stanley Direct through this affiliate link [29]. Terms apply – Charles Stanley [29]
“Can I use a trust to pass my property to my adult children?” – This Is Money [30]
Average pot to purchase an annuity rises 160% to over £166,000 – Which [31]
Fixed tariffs to beat the energy price cap – This Is Money [32]
Get up to £100 as a welcome bonus when you open a new account with InvestEngine via our link [33]. (Minimum deposit of £100, T&Cs apply, affiliate link. Capital at risk) – InvestEngine [33]
The self-storage pitfall that could cost you £2,000 a year – This Is Money [34]
How to qualify for the attendance allowance benefit – This Is Money [35]
Homes for sale near great schools, in pictures – Guardian [36]
Long-term gilts rise mini-special
UK government borrowing costs hit a 27-year high – BBC [37]
BoE chief warns against ‘exaggerating’ rise in government borrowing costs – Guardian [38]
Torsten Bell has made me want to buy bonds – The Times [39]
Note long-dated bond yields are rising globally – Reuters via MSN [40]
Comment and opinion
AI hype will spur investors to do the wrong thing – Behavioural Investment [41]
Four years on, the cost-of-living crisis endures – David Smith [42]
Europe’s small-cap golden age – Verdad [43]
The relationship between time and money – We’re Gonna Get Those Bastards [44]
Proof of wealth – Of Dollars and Data [45]
The case for short-term TIPS [PDF, holds for linkers, too] – Mekata [46]
How to never run out of money in retirement – The Times [47]
The 4% ‘rule’ and risk – Humble Dollar [48]
Why it’s a terrific environment for bond income – Morningstar [49]
The benefits of not regularly checking your net worth – Financial Samurai [50]
Not-at-all biased Coinbase makes the case for crypto [PDF] – Coinbase [51]
At what point do passive investing principles no longer apply? – Oblivious Investor [52]
Naughty corner: Active antics
The new currency is narrative liquidity – Groundwork [53] [h/t Abnormal Returns [54]]
How consumer surplus affects pricing power – Flyover Stocks [55]
Big fund inflows can be a precursor to poor returns – Morningstar [56]
A good memory makes you a better investor – Klement on Investing [57]
Is Venture Capital finally starting to come back? – Institutional Investor [58]
Multi-asset managers ‘stuck in the past’ – Trustnet [59]
IPOs don’t really leave that much money on the table [Research] – SSRN [60]
Kindle book bargains
Flash Boys by Michael Lewis – £0.99 on Kindle [61]
Alchemy by Rory Sutherland – £0.99 on Kindle [62]
The Green Budget Guide by Nancy Birtwhistle – £0.99 on Kindle [63]
Techno Feudalism by Yanis Varoufakis – £0.99 on Kindle [64]
Or plump for one of our investing favourites – Monevator shop [65]
Environmental factors
Why plastic-filled ‘Neptune balls’ are washing up on beaches – BBC [66]
Europe debates restoring wetlands for defence – Semafor [67]
Global temperatures to remain above normal, despite La Niña… – Guardian [68]
…with Panama’s ocean upwelling failing for first time in 40 years – BBC Wildlife [69]
World’s largest sand battery switched on in Finland – Independent [70]
Electric cars’ range almost halves when driving in heatwaves – This Is Money [71]
Robot overlord roundup
Chat GPT-5: the case of the missing agent – Second Thoughts [72]
AI and jobs, again – Noahpinion [73]
Will AI ‘do a Bloomberg’ on private markets? – Colossus [74]
Cloudflare’s CEO on saving the web from the AI oligarchs – Crazy Stupid Tech [75]
AI will end the Magnificent Seven’s dominance, says fund manager – Trustnet [76]
Not at the dinner table
The authoritarian checklist – Can We Still Govern? [77]
America’s gun problem isn’t hard to diagnose – Garden of Forking Paths [78]
The myths of Chinese exceptionalism – Scott Sumner [79]
Online speech laws in need of review after Lineham arrest, says minister – BBC [80]
UK suspends refugee family applications – BBC [81]
Xi Jinping says it’s peace or war at China’s grand military parade – Guardian [82]
Off our beat
UK graduates crippled [83] by debt swap degrees for plumbing courses – Standard [84]
Breakneck’s [85] take on China vs the US pits engineers vs lawyers – Noahpinion [86]
Why US capitalism is a success story like nowhere else – WSJ [87]
Hot mic catches Xi and Putin talking organ transplants and immortality – BBC [88]
American Football teams ranked by value on the eve of new season – CNBC [89]
This is still your first time – Raptitude [90]
And finally…
“Life makes you pay…everybody pays something.”
– Min Jin Lee, Pachinko [91]
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