Evening star., 1936-09-12
BRITISH BUILDING
D|FFERSFR0MU.S.
Property There Is Taxed on
Basis of Income, Not
Capital Value.

Out of Britain's building boom two
facts with profit can be examined by
the United States-the British version
of the single-mortgage system, and
the British version of trade co-opera-
ton. This is the opinion of the
Architectural Forum, which, in its
September issue, points out essential
differences between the English and
American building and realty systems
in a full exposition of the mechanics
Of the most extraordinary building
boom in two centuries"
Pointing to British trade co-opera-
ton as necessity yet to be achieved
in the United States, the forum says:
The only element indispensable to
the achievement of this cooperation
is one man strong enough to impose
his own integrity on the movement.
In England it was Sir Raymond
Unwin, an architect and an incor-
ruptible idealist In the United States
1t might be an Owen D. Young,
Harry Hopkins, Robert Moses or
Stephen Voorhees,"
The whole complex of realty in
England is unique and not to be COM
pared with the United States version,
save in the most restricted manner,
the forum says. Not only the GUS,
toms which embellish, but the theories
underlying every element from law
to land are different.
Vacant Land Untaxed.
I'm Great Britain real property is
taxed according to its income rather
than as in the United States, accord
ing to its capital value. Therefore
vacant land and some classes of
vacant buildings 60 completely un-
taxed. Thus the English speculative
builder can pick up land at a price
which does not have to take into
account backlog of taxes, and is
therefore a great deal cheaper than
equivalent United States acreage"
Touching on point more familiar
to United States builders, the Forum
points out: English labor, especially
those workers in the building trades.
are tightly unionized according to
crafts" Wage rates are determined
by the National Joint Council for the
Building Industry, a loose federation
of building trade employers and en-
ployes which determines nationwide
scales of wages for towns of various
sizes formulated with reference to
the cost of living index of the min
istry of health. Unskilled workers
receive wages roughly rs per cent the
I1t nf "a cly
and the standard week is 40 hours
In sharp distinction to the United
States, labor in England customarily
accounts for but 80 to 35 per cent Of
the total cost of construction"
Building Societies Imposing.
English building societies, the Fo-
rum points out, are much more i'm
posing affairs than their American
counterparts. "If you were to go to
England this week to raise some
money with a mortgage, the first
thing you would learn would be that
in that country building and loan
ASSOCIATION Is called building So
ciety.' The best measure of the build
ing society's importance today may
prises the largest single type Of in
stitution catering to the small in
vestor. About IL per cent of the
adult population of Great Britain are
currently investors in building So
ciety certificates. The British build
ing society was born and raised on
the concept that single mortgage
with an 80 per cent coverage is good
business, where the coyerage applies
to value or sales price, whichever Is
lower"
Concerning interest rates, the Forum
points out that while the going rate
on mortgages during the 2Os had hov-
cred around 6 per cent" the lowering
of the cost of money by the British
government in 1892 brought the rate
down until today AZ per cent mort
gage money with an 80 per cent COW
erage Is the rule. Funda mentally. the
rate is made possible only by the Eng
lish investor" because it depends on
his willingness to invest savings at
az and 8 per cent with the building
societies.
Mortgagors Are Different.
'The United States financier quails
ut an 30 per cent mortgage, talks of a
5 per cent equity as madness" the
Forum says. And, iundsne entally. he
Is right. because the United States
mortgagor Is not the British mort
gagor. The British nlortgaRor is one
Of the best credit risks IN The world.
the United States mortgagor one of
the poorest. As q social animal the
average American is still unstable be-
cause he still believes in opportunity
the kind OF opportunity which will
give him a better house tomorrow, or
which will justify his purchase ct to-
morrows home today. But The Eng
Iishmsn, the happily limited, happily
elass-conscious Englishman, tuys his
home as he takes his wife-for life"
Although the English Co not know
Tor sure what has given them so much
success in building houses, they be-
lieve it lis merely another typical in
stance of Britaln's ''muddling
through" Tn Great Britain" the
Forum says, pointing Out the nder-
lying difference between the English-
man and the American, Cooperation
long ago graduated from q conven-
fence to recognized necessity. and
the results are noteworthy. Cooper
alton is word which, from too much
repetition, falls dead on the American
ear"