We Will Lose The Property Owning Middle Class
"of all my economic predictions I think this is the one that I'm most confident about that we will lose that property owning middle class over the next 30-40 years um so what does that mean what does that mean well fortunately if we want to know what economies without property owning middle classes look like it's really easy to see that because we the world is full of them"
UNDERSTAND, SHARE & PUSH BACK
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Performed by Gary Stevenson
@garyseconomics
Produced by Simran Mohan
@mohanmedia
TIMESTAMPS
00:00 - Introduction
00:48 - Has the UK always been Unequal?
02:52 - Loss of Assets & Increased Debt
04:58 - The Rich get Richer
06:57 - The Middle Class
08:48 - Governments & The Poor
10:20 - Prediction & Other Countries
12:20 - The Slumification of London
14:22 - How to Fix It
I was born into a working class family (although I think the term is designed to mentally limit your aspirations) and I now own my home. I am nearly sixty and I remember from the late 70s onward. Currently because of energy prices we have switched off the hot water and we ration the radiators. I haven't had a holiday for five years anywhere. My van is second hand, we ration food and our standard of living will fall another 12% over the next two years. I agree with everything you say but we need to emphasise that our current conditions are a political choice. The future can be radically different but people need to get behind this. Next weekend the nation will be celebrating the coronation which will cost them in excess of 100 million and is a party for the wealthy elite. Will the people of this country ever stop and truly think of a different more equitable future or will they go on being a willing participant in their own poverty. Political change is needed and that begins with education. Thank you for all you do.
People are accepting the coronation because they get a day off! Don’t think many agree with the monarchy anymore, but a day off? Why rock the boat! 🤦♀️
I agree with everything you say but we need to emphasise that our current conditions are a political choice. ========= WAS a political choice. The choice was made in the past. So here's the problem Gary won't talk about. Your share of the state's pension debts is £600,000. This year's increase, £60,000 How are you going to pay your fair share? If you don't, the problems get worse. On the corronation, I agree. A waste. But that's just under 200 people's share of those pension debts. Now those debts are off the books, because the civil service uses Enron and Bernie Madoff accounting methods. The future will be radically different. Radically worse
Totally agree. Boycott the coronation and boycott the gov’t and their corrupt private interests.
I don’t exactly know what you mean with political change. All political parties are corrupted and bought out by the people driving global control. When you control food and money (which is what it’s happening) there’s nothing people will be able to do.
The political machine is out of date and corrupt, the young have abandoned it, people have been manipulated and continue to remain in a zombie state of psychosis.This is how the powerful manipulate and coerse the population to tick a box on a piece of paper and then make the claim " you are governed by consent".
Watching Question Time this week I was surprised to see some of the audience making your point about taxing the rich during a discussion on the cost of living. Hopefully your message is beginning to cut through to the mainstream. Keep up the good work.
That's great. The channel is growing a lot, so hopefully we are starting to have some sort of effect on the public consciousness, even if only a small one at this point.
@@garyseconomics We def need to have a more exact definition of "rich" and "wealthy"
*CAPITALISM IS A FUNNEL* it funnels money to the top - every £10 YOU spend 1penny makes it to the bank account of the ultra-rich and it STAYS THERE The issue is that does not HELP the ultra-rich in any way, to keep that 1p worth 1p for the grand kids it has to be invested and property is the 100% rock solid thing they can buy for the grandkids. So you have a push-pull - the ultra rich are soaking up money from the system and buying up the property with it. THIS is why you HAVE to tax the ultra rich, but they dont like that and >>> And they pay off politicians to stop them being taxed. But if you dont tax the ultra rich then the system runs out of money, you solve that by giving debt to the working class but they are now up to their eyeballs in debt, so the middle class has to be hacked into. Money is the OIL in the economic system - it facilitates movement - the UR are a massive oil leak and we just keep topping up the system with new cans of oil... The other problem is houses are too expensive - the U-R want your mothers house for £200k not £500k - so a nice big CRASH suits them just fine, they are insulated from the effects and they can buy up capital assets super cheap.
It's a cost of government crisis. The idea you can tax the rich to solve it is farcical. The reason is you need to start with the analysis of where you are. ie. How much debt the state has. Then you look at the cost of that debt. Given that information you can start asking the basic questions about how much extra tax you need. This is what gary doesn't do. He lives in a fantasy world where the debt doesn't exist. So given you ahve worked out he cash requirements for the state, you can ask, can you get someone else to pay for you. The answer is no. There aren't enough rich to pay. Turns out there aren't enough poor people to pay too. For example, just for pensions, your share is £600,000 and this year's increase is £60,000. How are you going to pay your fair share? Gary won't tell you about those pensiond debts. The reason is he needs you to think you will get your pension, so you pay in. Not going to happen.
@@Nickle314 Sorry dude that is total bullsh!t. "you need to start with the analysis of where you are. ie. How much debt the state has." fantasy land bullsh!t starting point - the state can pay the debt tomorrow by printing money, they can stop inflation running away by taxing all that money back from the rich. If you cant do the basic thinking on this level dont even try to tackle the hard stuff. You are just massively out of your depth.
Totally agree. I feel it happening all around me. I know my elderly relatives will end up using every penny from the sale of their homes when they have to move into care homes. My three children all went or are at university (I told them not to!). My first daughter has two degrees and masses of student debt. She earns minimum wage and lives with five others in a rented shared house. She can't even qualify for a small car loan. My son looks like he will have masses of debt and not even good grades to show for it. My second daughter went to university locally and reduced her debt by not renting accommodation and works hard to achieve good grades. I don't know how any of them will achieve buying even a small home in the future. I just try to help in the middle and can't even bear to think about the impact of grandchildren in the future. When I drive home from work, I see these massive apartment blocks owned by corporations charging £2,000 per month to live in a studio pod. It won't be long before people are living in cage homes/coffin homes like they do in Asia.
For me rich = above average wages, wealthy = money from assets, people don’t work for a living. I think we tax wages enough already, let’s start taxing wealth instead 🙏🏻
OK, so PS have a major asset, their pensions. How much do we tax them? If we take a GP lots are sitting on pensions with a notional value of 2-3 million. How about we say 50% tax, paid now.
@@Nickle314 - I’m a pensioner who is now being taxed. The triple lock meant my income is now just above the tax level because I also have a gold plated public sector pension of £55 per week. It means I’m worse off in real terms, so I’d rather not be taxed any more than I am now. If I was rich, fine, but…
@@sososoprano1 So here's the question. If you don't mind telling me when you retired and what salary you were on? What I'll do, is I'll put that into a calculator I have, and it will tell you what you could have had if your NI had been invested. That after all is your wealth that the state took. I'll even add on the 15% of income that went on your public sector pension contributions. That will tell you what your pot would have been worth, and the income you could have got from it. You can then compare this against what you recieve. That's based on historical wage levels, adjusted for age. Turns out young people earn less than middle age and people closer to retirement slightly less than middle aged people. It takes that into account. It's also based off the FTSE all share, which is representative of the economy as a whole. That comparison shows you the issue.
@@Nickle314 - thank you, but I’ve never had a salary. I’m one of those weirdos who worked in alternatives,such as on a radical magazine, in a wholefood collective, in a radical bookshop. Stayed at home for a while when my children were young (couldn’t afford to go back to work, and didn’t want to because I was an older mother and had had three miscarriages), then got a job in a primary school supporting children with SEN. I could have earned a lot more as a pharmacist, but couldn’t bear the thought of being stuck, bored to tears in a chemist shop (this was before the days of community pharmacists) so did those other things after finishing the degree. I don’t regret any of it, because what I did for a living suited my temperament much better. However, I’m very aware it was far easier for me to live that kind of “alternative” lifestyle then than it would be now, mainly due to the cost of keeping a roof over our heads.
@@sososoprano1 Well I've give you the numbers for Mr Average, retiring at the end of last year. If his NI had been invested he would be sitting on a pot worth £1,355,539 That generates an income, fund untouched of £44,055 Based on the FTSE All Share and no taxation by the state. The state offers a share of the pension debts of £600,000. That wouldn't exist if the money had been invested. He gets an 11K income from the state 30% of taxes currently go on the state. So if you complain about wealth inequality, there is your cause. Low take home pay? Government debts cause that. Pensioner poverty? Yep, same cause Social care crisis? Yep same cause Lack of investment? You've guessed it. That's why the left wants to hide the debts.
I keep sending your videos to my FIL who was very much Conservative (pre Boris) he’s coming round, he has grandchildren that this is affecting. Keep up the good work! As a council Estate girl to a council estate boy - proud of ya! Xxx
It's interesting to hear of people coming around regarding their views. Good for him. So many people are very mentally rigid.
I am experiencing this in my family first-hand, in two ways. 1) House prices: as already discussed extensively on your channel my brother and sister are now in their 30s and 40s and do not own their home they are stuck renting because they cannot save up a big enough deposit fast enough. I am lucky, I got a house 12 years ago when it was still possible and of course I had some help with my deposit from my parents. 2) Social care and care homes: something not discussed widely as far as I know, the cost of care homes. My Gran, bought her council house with my Grandad in the 80s, and sold it at a huge profit so was able to buy a 250k house. But now she is in her 90s and cannot care for herself, so she had to sell her house to be able to go into a care home that can look after her. She is paying £950 per WEEK. She has been there for a couple of years already so that's 100k of her assets gone. She was in a cheaper place previously paying around £400 a week, but that was closed down and sold by the housing association. The assumption that our parents houses will be inherited by us is incorrect if this continues. We have a large amount of older people now requiring long term full time care and the care homes that should be available for them at reasonable rates are being closed down in favour of high-cost private care homes that will take your inheritance. My mum has a nice house she has put a lot of money into over the last 30 years. But there is no guarantee the asset will pass to her kids or grand-kids in any way because she will likely, I hope, live for another 20 years or so and will require residential care at the end of her life which, if we, the kids can't pay for it, unlikely unless we win the lottery, will require her to sell her home. No way around this, unless we care for her ourselves which is a full time job and would mean we cannot work full time, and let's face it, is not ideal. Both these problems could be, not fixed, but mitigated for, if the government built more affordable houses and care homes, but they won't, because that does not make money for the upper classes and that is what this government is all about. I'd like to think that Labour would be different but I don't have much faith in them tbh.
The Care Home boat sailed over 20 years ago. The best care homes were always council run, but they were gradually closed down and phased out in favour of privately run care homes. All governments, including labour, have been complicit in this destruction over the last 40 years, but the tories shoulder the lion’s share of this trend. Everything Gary says makes sense and can be applied - not just to property ownership - but right across the board.
Good analysis. The people of this country need to fight for our rights to live a good life, not one leached on by the gov’t and their crony private interests.
Labour have no intention of solving the housing crisis. I don't remember even Corbyn talking about that
1) Migration has a major impact. That drives up demand, drives up the price of property. Cause - government policy Second Quantitative easing drives down interest rates. That makes the monthly cost of property low, so the purchase price increases. Cause - Government policy 2) Social care. If Mr Average had invested his NI, his wealth, and retired at the end of last year, his fund would be worth 1.4 million generating 45K a year in income. So 20% of people need social care, a care home. They need that for 2.6 years on average. 100K a year average cost. ie. The expected cost is 0.2 * 2.6 * 80. Just over 50K. That would be the real insurance cost. With 1.4 million in the bank, you can afford it. All that's needed is a true safety net that if you run out of capital, other people help. So why is there a social care crisis? The state didn't invest the menty they spent it. So the social care crisis is caused by the state. The state is the problem not the solution. So how do you fix it? Your share of the pension debts is £600,000 and that's increasing at £60,000 a year? What's your fix that doesn't make people poorer?
Labour is demonstrably the better bet though. Easily. Sure they're partially bought too but they're less stupid, they realise you can't allow the parasite to actually kill the host. The tories are stupid. They'd let the parasite kill the host.
The care home problem is one of the reasons I find myself wishing for some very quick terminal illness to take me in a few years, so my son can have the proceeds from my cheap, but mortgage-free house. How horrible is it that I feel like that, especially when I’m enjoying life at the moment, apart from huge anxiety about the future for following generations.
It's a real shame that people like you would think something like that and so strongly that you've said it over here. Care home funding is something that's bothered me for some time. The wealth that you've accumulated over the years then gets taken by care homes who are owned by, you guessed it, the rich. I really hope your son has the capacity to gain his own wealth. I know I'm lucky enough to have that so I can tell my mother she has nothing to worry about, I can support her rather than the other way round. Thanks, JP.
@@jonp6798 - thank you. I don’t think it’s an uncommon feeling. As for my son, a few years ago someone in his position would have been more certain of a decent future, but now… he has just finished a PhD in particle physics and is bracing himself for the thought of applying for hundred of jobs and being rejected or hearing nothing back and if/when he does find something, being stuck in a ramshackle multi-occupancy house, paying a huge proportion of his income in rent, just like many, many others are. It’s all just part of what’s broken in this country.
I work in care, there is no way i would stick any of my family in a home. I find it disgusting that people just dump their relatives.
@@sososoprano1 Well if it's any consolation he has completed a PhD in something he loves. He WILL get work with a brain that can achieve something as great as that and he will spend his life doing something he loves. Fingers crossed for all the applications :-). As soon as he has something and hopefully earns some more money his life will start to shift into owning hopefully and you won't have to worry so much even though it can seem impossible at times. I wish you both well, JP.
@@jonp6798 - thank you. That helps my anxiety.
The middle class is already diminishing. Gary makes the economic points brilliantly. I would say the cultural loss of this is even more devastating for us, culturally and economically.
Having lived through the 70s and experiencing poverty I can see some good and bad points. The bad was heating and food were hard to come by. But the positive points were community, everyone was in the same boat, little luxuries made big impacts like Xmas , chocolate or your birthday, a good film on telly was great. We pulled together, house party's, good company, no one looked down on you, we were all the same and appreciated small things. I remember my nan knitted me a bobble hat and I was over the moon. People were more friendly and happy. But if it happens again I fear it will be all the bad without the good because people are different nowadays.
I remember going round the neighbours to watch the '66 world cup, cos we didnt have a telly. yes sharing, yes community. Now, not to get into the '4 yorkshiremen' sketch (whitch i love). in this town we currently have a thing called Share Shed. You may have similar in your town. A trailer in the market where you can cheaply hire things you dont need every day. a power tool. Some catering equipment. it's fab. Yesterday we has a SHARE FEST!! all day festival for community share stuff. seeds plants, sewing, cooking, mending things, you can maybe imagine. it was fantastic. So it's not all about the old days. We can still do it. x
Well nowadays people in the west are more hedonistic which prevents saving and causes others problems with technology taking up people's time instead of improving them its replacement in the work place.
You are correct. Times have changed and unfortunately there may very well be a lot less of that community spirit to go round.
Spot on with those observations and as for heating, many of us from that generation grew up without any real heating a in the home other than a fire place. The telly was rented as they were hugely expensive and not that reliable. The whole attitude to food was very different too, no one would have thought of having ready cooked meals delivered to their door.
There's a good reason for this. We can see who people really are today because of the internet and comment sections like this. It's good and proper to help people and share, most will agree. However, people are going through hard times because of the government and their collectivist cronies that pit us against each other, send us to wars that have nothing to do with us and supress our liberty. These people still somehow believe that it's the "rich" or "wealthy" who are at fault and they must be taxed to high heaven to pay for the faults of government and collectivist cronies. Our economic system isn't capitalism, it's a mixed economy and it leans more towards socialism. The government control over 80% of the entire economy. They don't even have to own the means of production. They still control it. These kinds of utopian nonsense beliefs have been rotting the UK for decades. Collectivist ideologies are absolutely poison and this is their reckoning. How can we expect to care for others outside of our own friends and families when people are hell-bent on destroying everything good in our country for a lie?
This is great analysis and a solid prediction. It’s exactly how real estate FIRE (financially independent retire early) people talk. They “look for deals” that “life circumstances” offer up. Death, divorce, job loss. These are reasons people sell their homes even if they don’t want to. That’s when the predators pounce with the insulting offers your realtor tells you you have to take because it’s the middle of a recession, “you can’t expect to get top dollar for your home.” Rinse. Repeat.
Really enjoying your content Gary from Australia, your analysis is spot on. "Home ownership data from the 2021 Census show a home ownership rate of 67%, down from 70% in 2006. While the home ownership rate remained around 67-70% from the early 1970's, the rate for different age groups has varied markedly over this time".
Don't you think a 3% decline in 15 year actually is evidence AGAINST the point - especially when those figures will be subject to so much error a 3% change could be just the rounding error in the data. I am not against the main point of the video - taxing the super rich / income from wealth properly. Just not sure that we will see the decline in the middle class due to rising property prices as suggested - it will come due to almost the entire tax burden falling on middle class who are on PAYE.
That’s because young people want to move around more. Buying a home is a shit decision anyway
@@paullegend6798 I think you need to look at the rate for each age group to see the decline over the generations.
@paullegend6798 I think the issue is at least in developed countries, the population is ageing rapidly, so even stagnation in property ownership means less houses owned by the younger/middle aged and more trapped within the older generations. Generational wealth is becoming more concentrated
@paullegend6798 I think the issue is at least in developed countries, the population is ageing rapidly, so even stagnation in property ownership means less houses owned by the younger/middle aged and more trapped within the older generations. Generational wealth is becoming more concentrated
I live in Canada, I used to live in Australia. I grew up close to Belfast with family mostly from the south of Ireland. I keep in contact with many people I have met or am related to. This is happened right across 'the west'. I have a gut feeling it is by design. It has to be
Another reason people are losing their assets is due to the cost of care for the elderly. People are being forced to sell their houses to fund the cost of their care which therefore means that that property can't be passed down to their children.
Put you children on the deeds long before you get ill
People need to invest in pensions. Which should pay for any social care needs in the future.
Very good point. I posted that inheritance tax (the limits for which haven't moved anywhere near in line with the value of the assets people pass on - houses) will erode the middle class. But you are right many won't even get to the point of being able to pass anything on as their wealth will get completely eroded by care costs.
@@johnrambo99999 They did, but then all homes got privatized and charge more than the monthly pension payout.
@@idokwatcher2062plus the market can crash and pension is vanished. Plenty lost pension from dodgy rich spending the pension funds. Which I guess the government has done also.
Interesting analysis. Although I’m Australian, I do believe that the middle class in the 60’s and 70’s in the US did not have to work 3 jobs to pay the bills. I’m 53 and when I was in primary school and high school, most families had just one breadwinner. Now, with the cost of housing so high, it’s virtually impossible to service a mortgage with one wage.
Thank you to my son who alerted me to your channel content Gary, & shared it and, thank you to you Gary for providing sound information, which you explain comprehensively so as to encourage understanding and interest most especially in we, who have been busily swept along with 'life' who are not fluent in this subject.I have learned so much from listening to you & evaluating your content and, I thank you for that.
Thanks Gary. One reason for the huge increase in house prices nobody seems to talk about is the change in lending over the last 30-40 years. Back then a bank would lend 3.5 times one persons income, plus perhaps half of a second persons. Now banks lend 5-6 times TWO people’s incomes. The result, inflation in house prices. Same number of homes, yet people can borrow more. The only winners in this were banks. When it comes to redistribution of wealth, I’ve commented previously. The simplest way that will begin redistributing wealth straight away is to ABOLISH TRUST FUNDS. They exist simply as a mechanism to avoid inheritance tax for the extremely wealthy. Back in the 2000’s, they didn’t exist and It’s the reason why huge country estates were moved to national trust, as families who owned these assets couldn’t afford to pay inheritance tax and keep the properties. This relatively recent change in policy just needs to be reversed
they've started to lend more than 5-6 if you earn good and a certain profession. I have seen some of these mortgages available. I suppose this is because these jobs are seen by the bank as being stable and not prone to fluctuations of income.
House price inflation has two causes. Demand side - 10m more people in the country in just over 15 years. Supply side (the most important aspect) - land usable for housing virtually didn't change for 70 years. We split city houses into flats, in the suburbs built more and more houses in our spare garden areas. Now we have generations that don't move out of home. But in no way could house building keep up with increased demand when the land for housing is government regulated and didn't change one bit.
@@paullegend6798 yes these are of course contributing factors too, they are spoken about widely. But keeping all other things equal, increasing borrowing limits from a total of 4-5x to over 10x (per couple) it must be inflationary. It’s exactly like printing money
@@timbennett3495 Its inflationary providing that not everyone has equal access to the 4-5x to 10x bank loan/mortgage. High income earners with a large deposit stand a better chance. Combined with @Badgerboy207 comments if everyone's chasing the same house because of the population increase (like what happened during the pandemic property boom), the people with high salaries will be able to afford to offer high amounts for the house, others have to fight amongst themselves on the lower end of the market. Those who can convince the bank to keep lending e.g. BTL landlords can therefore keep throwing themselves at more property assets almost limitless.
It the tax system, why it harder to save for a home
"The middle class is a lie. There are only 2 classes: The working class and the owning class, and the latter will ensure that it stays this way, either unknowingly through not understanding that the way they stay rich is through siphoning off money from the former, or worse: knowingly."
I think things are changing through technology and it might end becoming the 'useless class' and the owning class.
@@davidbrand5925 bit telling that you don't see the owning class as being useless already. Lol Being in tech, I am happy to report that we are nowhere near tech being able to replace the majority of people who are needed to keep life running, and much further away from a point where AI can't be outsmarted by teenagers.
So, my parents saved up for years and finally managed to get a mortgage when they were 50 and have just managed to pay it off slightly early. I saved up when I was an apprentice living with my parents and stayed with them to save for a couple more years and paid them board money. I could afford a deposit for a house. When I pay my mortgage off, I somehow don't deserve this? I'm just the "owning class"?? What a disgusting way to think. Punish those who did better than me. Punish those who made better choices. Or perhaps it's, Punish those who weren't born into the same circumstances as me. I'm working class and I have a mortgage.
@@AtlasofInfo I think that you miss the difference between the 2. You would not be owning class just because you own your house. You would still be working class because you work. Owning class gain money through acquiring a resource (such as housing) and getting other people to pay for it's use. You would not become owning class unless you got to the point where you had enough properties rented out that you could live a comfortable life without working. There are people who earn hundreds of thousands of pounds a year who are working class, and there is no punishment implied in what I said.
@@greydoesthings Okay, fair point. I agree with that. There is no need to own many houses and charge extortionate amounts of rent. However, renting is needed but perhaps a cap based on the cost to the owner would be better idea??
Gary, thanks for making content so easy to understand.
Another top video, Gary. Love the way you make really complex problems so understandable and easy to get your head around.
Keep up the great work, Gary.
Fantastic succinct explainer. Gary - you need to get your message into schools, Sixth Form, Unis, so this is understood and how to interpret govt policy to judge how to vote. Thank you, Gary.
Are you a comedian? They terrorise kids with the climate change hoax and then confuse them with transgender circus freaks giving lessons. The education system was infiltrated and corrupted decades ago.
Things are as they are because we allow this to happen!
Thank you for sharing your knowledge
Love the content, thank you for the education
Been preaching this for years. I agree 100% and I love the way you explain these concepts so clearly
Great argument and explanation. Very well explained.
Brilliant. Clear, to the point, obvious once it is explained and most importantly - said with good intentions. Completely agree with the underlying thesis and the proposed solution.
Thanks for another excellent video Gary ❤
*CONGRATULATIONS ON THE CHANNEL GROWTH* just noticed it.
Gary - your accessible explainers are so helpful in understanding our predicament. Keep going ✊🏾
Well done Gary really well explained
Thanks! Another fantastic video!
Hi excellent video. Another danger is that weakening the middle class also weakens democracy you need people with skin in the game. The ancient Greeks understood this all to well
A brilliant explainer, thank you Gary 👍👍 Let's keep spreading this message
Send his videos to other people
Thanks again Gary.
Excellent! I agree with you A few things I've realized in life too .. (1) There is always an opposite to everything right over to extremes... (2) The best outcomes are usually produced in the range in the middle, usually fair to both sides, never at the extremes... (3) Another is that things and events in life are circular in their organisation and that it is a circle within another circle. Sounds crazy to those who haven't come across it but your realization fits right in. I'm new to you and I enjoyed your take ❤
I.E the middle way in Buddhism. And the Eight fold Path
@@richlee509 I don't know; makes me wish I'd learned about Buddhism earlier though. 😊
Just found Gary after seeing him on another doco about the economic divide. It’s not just the UK we are seeing this happen in Australia right now .
Another superbly explained video Gary. I love the way you take complex economic issues and make them understandable for the layman such as myself. I hope one day you stand for Parliament, the economic status quo needs challenging more than ever and it can only be done effectively if articulate and informed people such as yourself have the political power needed to reverse our increasingly unequal society.
Yeah. He has a simple one sentence solution to all the economic problems that countless others have been unable to find !! Amazing !! Who knew it was so easy ??!
Here’s your one sentence solution; stop fractional reserve banking and back the currency with commodities and hard assets or bitcoin - open ledger technology so the money supply Can’t be inflated and the nations wealth stolen through the inflation mechanism.
@@2msvalkyrie529 No one said it was easy. It’s easier to explain a complex subject matter in a complex manner. Gary’s skill is explaining a complex subject matter in a manner that most people can understand - something that is difficult to do. He also analyses economics from an angle that 90%+ of the mainstream media in the UK avoids because he’s calling for a fundamental redistribution of wealth through the redistribution of asset ownership by using the tax system. Contrary to what you say, there are plenty of other economists who have been able to “find” the solutions which Gary puts forward, but they don’t get much support from political parties or airtime in the MSM because most of the media, wealth, and power in this country is held by billionaires and multimillionaires who don’t want the status quo challenged.
Very good analysis Gary. Well done
Brilliant thanks again gazza. Smashing it with these vids bud.
i will likely be one of them this year. mortgage 50% higher than pre covid. disabled son they cant find a school space for so having to home school. so i can only work part time but have huge cost increases. unsustainable. i fkin hate this country now.
I’ve seen it a lot recently on political programs! It’s heartening to see! I think a good point to make is Elon Musk lost 13 billion in one day and was still the 2nd richest in the world! Proves the point they can afford it, we can’t! xxx
Keep your head up, I totally agree with you though, things have been getting worse nonstop in the UK since 2008 and I was in school back then (I'm 29, I also have autism spectrum disorder) it isn't easy at all. I've never owned a house or a flat. Never will, but I'm lucky I still got my own place which is rented. A lot of people in the whole of the UK do not have what you've got which is a property.
@@HShango yeah I'm autistic too. I'm 48 tho so got on the ladder a while ago thankfully. I feel for those younger who never even had the chance to own. Under 50s been thrown under the bus all our lives in this country.
You gambled that your mortgage wouldn't go up. Would you be posting that you were winning when the rates were low?
the cost of a house nowdays is well beyond anyone on a minimum wage income 30 years ago i was just able to afford my own run down ex pit house on a low wage, 30 years before that ,my mum and dad could afford a nice newish house in a nice area on my dads factory wage alone and start a family..and they were 23 years old! it doesnt take an economist to see we are being well screwed over
What's the obsession with home ownership?
@@skyblazeeterno under communism no one own property = no middle class
Such a brilliantly structured video! The only bit I'd like you to expand on more is a picture of how taxation would change the dynamic of the economy to show how (relatively) easy the solution is. You've talked about it before but that taxing extreme wealth in this generation would encourage wealthy consumer spending instead of buying assets, and then how maybe something like a super wealth inheritance structure or breaking of trusts would return wealth to government through generational taxation to equalise things like education and health standards over time, which would then improve prospects for the poor to increase wealth and improve fairness as much as inequality, or something like that. I just think a lot of people are worried it's either free markets or communism and it would be good for the other circular picture to be painted that doesn't just smash the middle class. Brilliant video though!
But it's codswallop. Why do you dumb down? Where are the numbers? Nothing about how much cash is needed each year to "fix" the problem. For example you aren't paying your fair share of tax. You have a £600,000 pension debt, run up by the welfare state to pay. We're in a mess because you are evading paying your fair share of tax to fund the debt. Now that's an accurate statement, but I've phrased it in a particular way to drive the point home. Unless you and every tax payer pays a fair share of the debts, you will get the shite outcomes. Since its a racing certainty you can't pay that debt, what does that tell you? Even Mr 1% cannot afford that debt. There aren't enough rich to pay that debt as well. Notice that Gary avoids numbers. He won't acknowledge the cause of the debt, socialist pensions because he wants to con you into paying into the scheme in the full knowledge when its you turn they will do a Macron, again.
You are amazing.... Thank you.
The next rew years will see one of the greatest transfers of wealth in British history - from the boomer generation to care home providers.
I looked up some care home company accounts. Far from making out like bandits the margins on care homes look really slim. I guess the massive cost goes on the price of housing / so the land/care home building is super expensive and the sad fact that having people around to help you in your old age is expensive (unless we go back to multi-generational living and look after our own parents)
@Paul Legend my point is, most boomer wealth is not going to be inherited by their children.
@@modestproposal9114Well if the children are not willing to look after their parents then deserved quite honestly
@Kerghan hard when everyone is working full time. Don't be a corporate power apologist. The rich are going to take everything. The idea of a property owning democracy with wealth cascading down the generations is another right wing con.
@@TitB1199 Horribly reductive view. You've probably never been around people in their 80s or 90s with both mental and bodily problems. Most of them need 24 hour supervision. What if you're divorced, your siblings moved abroad and you have two very old parents to look after? As one person, that is simply not feasible. I've seen my uncle do it and struggle so hard, it left him drained, lifeless and physically sick. Modern families are affected by so much; economic instability, divorce, less children, moving to find work, longer lifespans... It's very arrogant to say "just apply these ancient solutions to modern problems" as if we can. We cannot because we don't live in the same world anymore.
Thank u Gary for educating us on just how unfair and rancid the system had got, you could’ve ignored this and got on with your privileged and comfortable life. Thank u for looking out for the little man.
What people don't understand is that this isn't by incompetence....it's by design.
Brilliant teacher, thank you!!
Cheers Gary.
What is most peculiar about the circumstances Gary is describing is that the rich, as a broad group, do not recognise that the situation they are creating is not actually in their interests. Being a rich person in a poor country is frightening and stressful and ultimately not particularly interesting or rewarding. The key aspect of western economies up to about 2008 was a recognition that we all do well if everyone's productivity rises. Somehow this idea has been lost. It is easy to see the difference between living in Switzerland or Luxembourg and Russia or the USA.
The drive to get money is a defence mechanism in an increasingly insecure world where money becomes more and more important. For example my friends who are well off professionals are busy accumulating assets as fast as they can because they are worried about education, good healthcare and homes becoming more expensive while taxes will go up on future earnings and income to pay for a welfare state that will become increasingly expensive but paradoxically increasingly threadbare and likely means tested. They no longer feel that they can risk relying on society and the common good to look after their childrens' future so they are taking the next best option of looking after themselves and their own independently as far as they can. The UK is already too far gone. There is no way back due to demographics. We would need to have set ourselves up as a nation for the challenges ahead back in the 80s, 90s and 00s but we didn't.
Brilliant info you give out Gary. Really respect it. Enough brown nosing now 😂. The reason I'm going to comment is to do with your point about living stabdards, cities etc. I live in a quiet town in South Cumbria. We tend to have our economy massively suuported by Sellafield, BAE etc. Even here you can see the decline in living standards. However, Ive just been a couple of days in Manchester city centre. What a shit hole that has become these last few years. You're looking around at people now and thinking 'fuck, this is really happening'. I was saying this to my wife, like, look around. Our society is in decline massively. Its sad man.
Hey Gary, long time Bro! I've been watching and sharing you videos as they in my opinion are invaluable to most people whom have not actually seen any of them yet and I'm committed to spreading the information, news and explanations you're presenting and putting out! You're doing some great works and it's so nice to see that your heart is still in the right place! I'd quite like to speak to you and a few things one of which is something Im sure you'd not only like and be interested in but also I think you'll find it will align very much with what you aspire to achieve here! Please let me know the best way to get in contact with you so we can talk. Just keep up the good work my long time friend!❤️💯🙏🏾
I sometimes wonder whether our current failed immigration system + population growth is a desperate attempt to shore up those diminishing returns, with more potential customers. The owners of industry + the government realise that the existing middle-classes are simply spending less, so they've decided to try and increase the population to make up the shortfall (ie. more people, each spending less between them). There's still money to be made selling an aspirational dream, especially to those who see even the UK of 2023 as preferable to where they came from. Especially, if you can make them take on a debt to do it. Have a look at the Uber riders, going around on eBikes. In what universe do you think UberEats wages would pay for an ebike. They are the exemplification of someone who's entire life is rented from a gangmaster. The bike. The job. The accommodation they live in. And the middle class are soon to be on that trajectory. Of course, this extended pressure on our infrastructure and housing stock is bad news for everyone except the 1% of asset owners. But - as it's not them being affected - they don't need to worry. They can just continue to rent our stuff back to us until the customers run out.
I'd be interested to know what you think is going to happen going into the future about the distribution between export driven economies and consumption economics. My prediction is this is what will inevitably cause a global recession. When the purchasing power of the middle class is essentially destroyed this will lead to a loss of exports which will lead to a loss of jobs which will create a messed up feedback loop. This is why a strong consumption base is essential for global growth.
Brilliant video Gary
excellent episode Gary
The plot of house prices in terms of salary over the last 150 years is really interesting. Essentially, we had nearly a century where the baseline cost of an average house was around 4.5 years of an average salary. The decade leading up to the 2008 financial crisis broke this entirely, and it has not gotten better since. It may infact be getting worse, but we will need to wait to the end of this housing cycle to find out. Considering the additional costs from intest payments on mortgages, as well as the significantly increased lifetime costs of a student loan from the recent change in interest payments, the cost of a house + higher education is going to be 3-4 times what it was in the 90s (I am ballparking the maths here, I haven't run the numbers). (Edit: my ballpark maths is based on what the new baseline price of a house probably is in the general post-2008 world, but at the moment we are at the peak of a housing cycle, so it is going to be worse today.)
So the housing bubble hasn't burst yet 🤨, I thought it did during the three years of lockdown and present day 🤨
@@HShango no it hasn't popped yet.
It appears to all have happened by design!
@@HShango If you look at house prices in real terms they didn't actually go up by much. They're just going up with inflation just like everything else.
what on earth is a housing cycle??
Love to hear more on the concept of how increased taxation of super rich elites might work. I know you have talked about asset taxation being key since physical assets cannot be hidden or moved. Are there any financial systems or economies globally where there is a similar model to this?
@@communist754 Singapore yes, they get about 50% of tax revenue from land and other user fees. China don't even have a property tax and their local land sales growth model is essentially a pyramid scheme.
60% of UK wealth is land according to the ONS, buildings do 'move' when taxed to the extent they depreciate and are not replaced, but land won't shrink when taxed, instead it is used ore efficiently. Much of the stock markets value is also reallly land, (corporate land holdings, REIT's, bank stocks) Land value tax can easily replace most of the current tax system and greatly reduce wealth inequality.
@@schumanhuman Good point, if land were classified in some way so as not to disproportionately tax farmland, this would be a majority of owned land. The land could be taxed according to the revenue it generates for example and rates further set according to its designation eg. agricultural, commercial, industrial, domestic etc
@@Jonwinnett Land value tax already does that, implict in the word 'value' UK rural land is 70% of total land, but only represents about 1 to 2% of total land value, so the tax would be minimal, the idea is indeed as you advoacate to tie land to it's site rental revenue advantages over other sites, prices are only used as proxy and rental data can also be used, LVT woul never be more than what a tenant farmer already pays for the same land for the 'privilege' of access.
Norway charges 'formueskatt' (fortune tax) above a certain threshold, (roughly over £100,000 offset against your debts). I think the rate is about 0.85%. If you had properties over this amount, you'd need to pay this every year. Weirdly, active debts can have their interest offset against the tax bill as well and I think young people saving for a property get special interest rate advantages on the savings. I don't think the endure that silly thing in the UK where you're paid less for simply being younger either.
That was really good. Learnt a lot.
Well said 👏👏👏👏
People will always want to own their own property. Having your own property is part of becoming independent after leaving your parents. People enjoy having aspirations and hard work and determination make these aspirations achieveable.
I had just watched your interview on the Novara Media podcast, and a lot of it resonated with me, as a millennial american in the midwest, actually. I am a twice-dropped-out of college factory forklift driver / material handler. I don't have the mind for maths. I tried to major in architecture for example, and failed horrendously. However, I feel that some of the things you said might actually be happening here as well. 5 years ago, the price of a cheaper house in this area was about the same as the current price for land, it looks like. Unless anything changes here, it looks like any chance I have of owning has kind of dropped away. The only housing going up, is very high-value suburban housing, (over possibly the most fertile farmland in the world - is it not more profitable in the long-term to have this land remain as farms?) and I can't figure out exactly what any of the homeowners would do for a living around here. I guess they must all commute to tech jobs in high-rises or work remotely In any case, my parents will probably sell their house and move to a part of the state with very cheap housing, though I imagine that the prices there are probably going up, as tech work moves there. I could buy a house up there myself, but I have no confidence that any blue-collar work is available there. It seems like places with cheap housing in america are job deserts. And I think they want to sell to someone they have more financial confidence in, than me. Which of course is their right, but I am sad that I probably never will play a real piano again, (which you can't really put into an apartment complex) when they do go I don't know, I'm kind of half-researching how to be a nomad, youtube is stocked with survival videos. And I guess in america, one advantage is that I guess it seems like there is plenty of space for that, though I haven't tried it. Thinking of the future makes me a little anxious, but I'm trying to cope with it Anyway, I know my rambling is a little disorganized, but I will tune into your stuff again I think. Have you ever been here, and if so, what did you think when you looked around?
Fellow American millennial here. Life is definitely scary these days. It seems like there are so many pending catastrophic disasters that there really is no hope for the future. And I say this as a married man with a child on the way. I think the best bet is probably just leaving the US, but I don't really know (I'm usually wrong about most things haha). Just letting you know that you're not alone out there, man. Best of luck.
@@scottandrews947 Good luck to you as well. Yeah I don't have any kids, and neither do my brothers, I think. But I don't think it's a bad thing that people still have them. It probably can give, or even force, a lot of meaning into life. I didn't always think that way, for a long time I was against people becoming parents, in this modern age
@@scottandrews947 I had an anxious dream last night, it was kind of a two-part nightmare. In the first section, an alien was chasing me, and a ship crew, down a duct. In the second section, I was hiding from Putin in the forest. I had married a Russian woman, perhaps someone he was related to. He was walking down the road with his agents, and was going to send his dogs at me in a trail in the woods. I covered it in brush and logs
Would love to have a beer with Gary and talk economics - good vid!
Shorts and tights. Gary, you continue to confound me. Love the video!
I agree, I told a friend this two years ago and she called me nuts and a conspiracy theorist, she bought a house (inflated by 20%) so well over what it was worth. Fast forward and her mortgage rate change kicked in which was exponentially higher than expected and her value on the house dropped too. She is now paying not only the higher interest off her home, including the 20% over and above that she paid which, with the decrease in equity is a bit of a blow. She also pays a higher mortgage cost. She wants to sell, but it's a lease hold property too which is so much harder to sell. Remember, a 30 year mortgage is not your home, it belongs to the bankers who you pay interest to for 10 years in the first instance before you even start paying off or denting the mortgage payments. If that house drops anymore, then she will be literally paying for a nehitive equity home that she will never recoup profit from. It's a money pit. Now factor in the new eco sustainability regulations costing nearly 30k to get the house up to a phoney climate standard, she will have to sell. We were talking last week and she said she made a "boob" buying. I asked if she had buyers remorse and she said she felt scammed.... No different to millions of Britons then who have been coerced into this ponzi scheme for years I told her. She used to mock me for renting, but I told her it wasn't wasted money because I can leave anytime or ask my landlord for a refuction.. I don't have any risk. It took her a while to realise that she too in fact pays rent, but at a much higher rate, and it can be taken from her at anytime if she defaults..... Eyes wide open moment now for sure as the proverbial penny dropped and she asked, "will I get my 30k down payment back?" Erm..... No!! That's the money the banks take and loan to other unsuspecting customers x10..... The interest they earn gives them hard assets, the amount they loan is digital and just numbers crunched into a machine and created out of thin air" " That's illegal though" "yep, by the powers that be who design and rig the system" "so I don't own my home" "nope" "What about people who have equity in theirs though and can afford to pay. " "The powers that be will find a way (climate crisis) to enforce new laws that deliberately obstruct and force investment to update homes that owners can't afford, thus squeezing them out." Eyes wide open again as more pennies drop. "so I have to sell at a deficit?" "Yep! " "And they keep all my payments made, and my deposit, and my house" "Yep!" "And do what with it?" "Sell to Blackrock who owns all housing construction contracts and rent it so they make huge profits from a property you used to own." "Why?" "Control, and so you will have nothing and be happy." "Crap, that's what that means?" "Yep" I recall her sniggering years ago when I stated that quote by Klaus..... But she ain't smirking now. Meanwhile, I continue to rent for now, cheaper than most, no stress, no risk..... And will probably wait for the crash to purchase a home one day for pennies on the dollar outright!!! I'm not saying I was right all those years ago, or that people didn't have their own choice however, to be completely closed minded to facts without doing research and tying yourself into a system that you believe has your best interests at heart, is a very trusting thing to do without checking the morality of these systems..... People are falling off the cliff in desperation, some are being pushed ( I feel for them) But others are willingly walking, blinded in cognitive dissonance!
We need a middle class government, for about 50 years!
💯 we don't need a multi millionaire clan like Sunak and Hunt at the top that's for sure
I do not want a middle class government that doesn't support the working class or the poor. Why should the government only focus on the middle class 🤨, when alot of the money you guys get is actually from the backs of us the working class breaking our backs for you lot to have a cushy life! 🤬 #Clowns
We need a working class government. I'm just not getting this idolising of the middle class who are the political equivalent of the grunt soldiers at concentration camps
No we don't. There's nothing inherently special about the middle class. Inevitably a subset of the middle class would accumulate more and more assests and then become the new elite. We need to abolish private property.
Thankyou Gary....I have worked very hard....worked my way out of poverty.....but honestly.....the generation below me.....Will struggle even more....because of ridiculous house prices.
Reading the comments and listening to you have confirmed that I'm doing the right thing by downsizing and buying my son a property. My peers have no intention of doing the same, but they bemoan the situation of their children and how they are going to struggle whilst sitting in their paid off 4 bed London homes. Their children will be 60 before they're likely to inherit, if there's anything left after care costs, only to pay 40% on most of it in taxes. My younger son will be accounted for in my will and will be helped by inheritance from my parents unless I can match the amount in a few years myself.
I fully agree that asset farmers need to be legally and socially forced to pay their fair share.
Great Video Gary, just one question: how does China figure in all of this, it has a rapidly growing middle class does it not?? Thx
Fantastic as usual Gary. Could you please at some point do a video about how your channel supporters can take some sort of action against the insane policy's of our government. Anyone that understands what you're saying needs a plan for action.
You are so right... look at all these flats being built with no parking provisions in London. It means the poor have to live in a flat that makes side hustles and multiple streams of income more challanging. Not only that, because of no parking and the parking resrictions on the street it restricts travel, work opportunities, and even means they have to rely on deliveries. All of this prevents the ability for more income streams and being able to take better opportunities further away. It also means that Transport for London have a captive audiance and increased regular income from the poor. In Sutton (South London) your looking at approx 10% of new houses have access to 1x parking space with the planning applications in the last 5-8 years.
Just leave
Middle class = skilled and professional working class.
That is a brilliantly simply statement. I have been working with the much more clunky "people who are just more successful versions of you".... i.e. they didn't particularly have massive advantages, they just applied themselves better and have more earnings potential due to the accumulation of skills through hard work. You also made be realise the best "class" based distinction is simply - those whose income comes from working vs those who income comes from wealth. Obvious now you made the point.
The only people who seem to be obsessed with the concept of class are the so called working class, why is that ?
I would actually say that the middle class are those born into a little bit of money and become team leaders and low level managers. I don't understand the defence of the middle class when it's essentially them doing the dirty work of the upper class. And what's this obsession with property ownership?
@skyblaze eterno The same reasoning could be applied to your position. If we don't strive to be better then we're all just slaves to the rich. That's what you want us all to be. Do their bidding at the lowest possible level. You want us to be a tribe again. Live in a tree or a cave maybe.
@@skyblazeeterno Who says the people you are replying in this comments thread are "defending" the middle class? And who said anything about property ownership, let alone exhibits an obsession about it.
I get your point but e.g. in Germany you have a very high percentage of renters and Germany is much richer gdp per capita wise than UK. What you want is house ownership but banning speculation in housing. And huge provision of publicly owned housing. Also UK was more equal because of the public housing available which has been privatised.
A massive social housing building programme plus better tenants rights and rent controls would stop a lot of the exploitative buy to let stuff
You're gathering momentum, I foresee exponential growth in the next year. First 100k subs in the next few weeks first step!
I have a income alone that is not on the graph of house hold income ( I came from a household where the gas bills and water bills were often late, or my mom had to go without) so I thought I was doing well, a big house, private school a fancy car etc etc , but when talking with other fathers at school they are not talking about mortgage rates, or financial assets varying - because they were gifted their houses by purchasing at well, well under the market rate think £2M house for £450k from their parents, which will find it's way back to them. My wife keeps saying we are comfortable but we are not rich, but when I think about growing up I believed that we were rich .. but it is all relative.
My moral compass sits very much on the hard left for most issues… but I get with frustrated with how the argument is put across by some on that side of the political spectrum and the middle class are treated like enemies. By broadening what ‘middle class’ means to anyone who owns a house, and pointing out how the middle class are most at risk from the ultra rich buying their assets, I think you are getting a message across much more effectively. This message needs to be spread far and wide on the biggest platform possible. When you strip everything back, the main thing that people tend to vote on is anything that is a threat to their way of life. This is why culture wars are such an effective strategy. However, the hands down biggest threat to our way of life in this country is accumulation of wealth by a tiny group of ultra rich people. We need to tax them. It’s a no brainer! The Labour Party should be making this fight instead of cosying up to the establishment. Shame on them for burying the Corbyn movement and returning to the Tory-lite politics of the Blair era.
Left/right politics is a nonsense. Ironically, by siding with the left you on the side of the establishment and the globalists.
I suggest you read some comments on here from home owners who are thinking they are hard done by...paid off the mortgage...own multiple properties...sorry the middle class DESERVE the flak they get
Two questions: 1. Will the rich realise they will suffer if they destroy the middle class? Saudis aside, the richest in countries without a middle class are poor compared to the rich in countries with. 2. What do you think about the global boom and bust cycle? It usually lasts around 80 years so it feels overdue that we should be climbing towards the boom. It felt like the pandemic might have been the trigger but maybe it will be another world war?
The Global South are beginning to develop an alternative system which will be inherently more stable.
@@johnwright8814 Interesting. Tell me more.
@@lucindasmith589 KZhead channel "Geopolitical Economy Report" has a video by Profs. Radhika Desai and Michael Hudson titled;- "De-dollarization is about more than currencies: As dollar system declines, what comes next?", which gives a deep analysis.
You assume a cycle is natural and cannot be changed
Society is a very dangerous place for those who have everything living in an environment when most have nothing.
Great video!
I agree with the thurst of your analysis, but we have to be careful of generalisations, For exampl, it is worth really looking at the detail of house price rises. It is complicated and full of contradictions. It depends a lot on area and type of property. In London at the bottom of the market, apartment prices have not gone up as much as many think, but rents have gone through the roof. In Newbury I know new apartments are roughly the same price as they were 10 years ago. It seems to me that the areas which really have seen massive house price inflation in Berkshire are houses, and I stress houses, in particularly desirable areas (for example in good catchment areas for schools). For example take Newbury, apartments in the centre are roughly the same price. But in a few select areas on the eastern side they have more than doubled over the same time period. In London I think the high end property market for sales is distorted by Hong Kong buyers (this is very significant, ask any London agent), 3 million HK nationals have been given rights to UK citizenship, they tend to be capital rich, and prices of property are low here compared to HK. Many of these buyers are purely buying as an investment and as a property for the children to live when their children go to a London university (properties near universities are particularly in demand). A few agents have told me they feel that that HK buyers in particular have prevented a major housing crash over the past few years.
I live in the UK, but am Italian, and this is a very British centred analysis. Whether you own property matters only if that property gives you a good return. In the UK it certainly does. Mainly because of laws supporting property owners and landlords. Property is good because of NIMBYS (so shortage of new supply), because rents are high and tend to increase by more than inflation (partly driven by legislation favouring landlords) because property capital gains are largely tax exempt (for main home, where gains are fully tax exempt and also somewhat in the form of inheritance tax, with a higher threshold if you own a home). In lots of other countries in continental Europe, owning property is not necessarily a good investment, and is often a poor one. That is because in many areas supply is greater than demand, because laws favour tenants, because the demographics are poor. So, whether you own property or not, this makes very little difference to the wealth and the well-being of households. P.S. Italy's owner occupier rate is higher than the UK, in case anyone is wondering. I wouldn't argue the middle class is necessarily stronger because of this.
Interesting from Italian perspective. Why is there a greater supply than demand in many areas? If builders know this why do they still build?
@@johnlesoudeur3653 they don't really build much, and in some areas they don't build at all (as the cost of building a new home can be twice the value of an existing one, so the market for new build is effectively only for people who are ready to pay a large premium for very energy efficient homes). Demand exceeds supply because of terrible demographics, and internal and external migration (highly skilled Italians moving to Milan or leaving the country). The main building activity these days is renovating old homes (entire block of flats) and improve energy efficiency, thanks to government grants. There are areas where housing is an investment and demand is much stronger, but this is effectively just Milan and a few other cities. Even in my hometown (in the wealthy North, and now impacted by a boom in tourism) prices are only marginally higher than in 2008. In say Naples or many southern cities prices are probably 40-50% lower.
@@lozkko Thanks for your reply. Interesting dynamics. My only experience of Italy is Sicily which seems to have a history of emigration to get out of poverty. I really liked Catania.
Its interesting to hear your view cos I have heard this before, that property owning is not such a thing in the continent, not so popular or so common. yet your last sentence seems to go against this? Can you explain a bit more? Maybe I have misunderstood.
@@helenswan705 ok, I will try to explain. I assume you own a car, but you don't expect your car to make you rich? Italy is a bit like that. Over 70% of people own, because it can be convenient, but they don't expect this to be a great investment. More like they own because it is relatively affordable in most places (we built a lot in 1960s/70s/80s) and while many hope that value of homes will keep up with inflation, that seems unlikely (based on past 20 years plus demographics, which are getting a lot worse). As for returns, rents are low, whether you get paid or not can be very hit or miss, and getting anything done by Italian courts takes years. So it is common for people who inherit a home from their parents to just keep it empty (or rent it well below market price to relations). It is not unheard of landlords giving their tenant who is behind rent a few thousand euros to move out, rather than go to court (I am a lefty, pro-tenant guy, I am not making this up!!) Germany is complex, more people rent because landlords are institutions like insurances, so you can live in your flat for 30-40years (life tenure) and you know that rent increases tend to be reasonable. House prices have increased more in recent decades, but I think this is temporary, and linked to the zero interest rate period. I don't think prices in Germany will continue to increase structurally at a fast pace, for demographic and institutional reasons (tenant protection is very strong).
What a lot of people with middle class parents are seeing is how much of our parents wealth will probably be used up by the time we get old. Even with the decision not to have kids, live in an area with low rent and low house prices, I am not going to have the kind of savings or pensions they have had, and it's pretty depressing to feel what you'll gain from parents dying might overshadow all the efforts of your own elbow grease, and by the end there will likely be nothing left. Or on the other hand they'll have to sell to pay for their elder care needs. Everyone I know from much poorer backgrounds deserved to have been lifted up instead of all that economic trauma. It's like the bottom two thirds of society are all heading for the bottom of the barrel, which isn't the equality we were asking for!
The slum housing you so accurately describe is very visible in Croydon (London outskirts) whereupon ex-office block after ex-office block are filled with the urban poor. To make matters worse, there are a raft of new, expensive apartment buildings for those who 'have' as opposed to the have nots - it is slowly beginning to resemble Mega City 1 from Judge Dredd.
Sounds a lot like ilford
well said gaz. top man.
Great vid again mate. I'm late 30s and have felt this drain from the middle class not long after starting my working career. Seeing good paying jobs harder and harder to get and a lot of mates (and myself) struggling to buy a house when our parents did it pretty easily. My personal tax has gone up hugely in percentage terms since before the coalition government here in the UK. I will support you all the way Gaz. Tax the rich ✊
The rich are mobile, they're not just gonna sit there waiting to be squeezed.
@@otterofdespair3387 any wealthy person wanting to leave because they don't want to pay a similar rate of tax to everyone else is welcome to leave. I think it's a myth perpetuated by the weathy that they are wealth creators (and might leave with all their wealth) - their money comes from selling products and services to the masses. If the masses are not 'mobile' and are still here, then the market for the products and services is still here. If the market is here but the wealthy people owning the companies that serviced that market have left. Then there is a big gap in the market for new independent businesses owned by people that want to live here to step into.
@@otterofdespair3387 tax property and stock transactions
TBH I was going to scroll past this. Who cares about this stuff? But. Your explanation of this serious issue really captivated me. I fear for my children being able to afford their own property. I’m in the enviable position of owning my house. No mortgage. It’s all paid up. House prices in this country far outstrip what a ‘ normal ‘ person should have to pay. Great vid. Thanks.
9:10 very good summarising of an important point
Excellent if disturbing podcast. Thank you.
A ❤ for every Australian watching this. 😢
See Argentina (amoungst a few others)
Great work Gary keep it up. Unfortunately, what is the Golden rule in life? : Who ever has the gold makes the rules
This is an important commentary, but when we talk about the wealthy buying up the properties, it'd be great to hear about offshore funds taking home in, for instance, London's real estate. The assessments are sound, but I feel there's a bigger picture to address.
Going forward from here Gary, what advice would you give? Would it be to purchase (if possible) even the cheapest property so you fully own it? Rather than getting a mortgage. A compromise I guess where instead of being obsessed with the ‘dream house’ or your ‘forever home’ that saddles you with a hefty monthly 25 year long payment, you try and get the cheapest that in theory you could buy relatively quickly. I’m thinking more affordable parts of the country
Need a new economic system and government, then the housing will sort itself out
If buying the cheapest properties in a city, there is the classic problem of a higher likelihood of social problems in the area, of course also tougher to bring up children.
@@JTucci100 I live in one of the most affluent areas in London and we still poverty related social issues here. Probably less but still
@@progressivedemagogue8480 Driving a taxi in Liverpool, some areas have higher proportions of customers presenting social problems, also more likely to have gang cultures. Yes, still exists in affluent areas, but out of the numbers of professions, drug lord or associated type of antisocial business and psychopathic behaviour is a smaller percentage.
@@progressivedemagogue8480That's London for you, where the poor often live in close proximity to the middle classes or even the mega-wealthy. I once lived on a small housing estate less than a mile from Buckingham Palace!
I would go further and put limits on house prices, rental prices, wage earnings, company profits and inheretance limits. On company profits, anything exceeding this should be reinvested into either the same or other businesses to improve product quality, efficiency or diversification. It could also support social projects.
I really like the point at about @4:00 and most non-econ needs like myself don't get that the problem with debt, leverage, is that volatility have exponentially more risk when levered. if you use 100% debt to buy a home and then the price drops bc even 1% ur insolvent and now you owe more 100% of the principle + interest on a property which is worth much less and your then incentived to sell the home and attempt to stop bleeding wealth/value in equity and who buys it at that point.. a wealthy all cahs buyer.
Hi mortgage rates, high council tax, high utilities bills are having a dramatic impact on capital acquisition and disposal income. Its rapidly been eroded and deliberately so
Property owning middle class is promoted by Thatcher? I would support heavily increasing council tax on second homes, so the money goes to the local amenities.
That sounds good keep the working classes poor
So those second homes that are owned and rented out by private landlords will just have the increased costs passed on to tenants. Not a bright idea that one 🤨
@@andygreen1677 it will break something as what we have is not working. Unproductive as for of buy to let is destroyed is better core drone expect for the landlords.
@@paulmessenger9836 lack of affordable rentals keeps the working class poor
keep going Gary, don't give up, is good , maybe team up with some more wealthier folks who are releasing the same message
Hi Gary interesting videos I think I agree that we are losing the middle classes. I have a question if you was to put an financial amount on what you consider wealth ie for someone to be wealthy owning assets how much would that be?
Its interesting that we've seen a transfer of wealth from the lowest class to the highest, but also in terms of the property market, a transfer from the middle to the upper. Here's my classification of Upper: Already own a home, might be paying off another. Middle: Have a mortage but still be at risk with no cushion of another property. Lower: Renting with little prospect of mobility.
We haven't. The transfer of wealth has been from the workers to the socialist welfare state. 20% of their wealth gets creamed off to go the welfare state. Where's that wealth gone?
Not completely accurate. Some of us old people own a cheap home in a rough area. Yes, having no mortgage or rent to pay out is a huge cushion, some of us are still struggling to pay bills. Trouble is, when you get old you feel the cold more, so this year I’ve turned the thermostat up from 13° to 16°. Current paying four times more for energy than I was a couple of years ago. There’s no way I could be counted as “upper class”.
I don't know about that as the late queen used to switch the lights off in her homes and possible turn down the heating.
@@sososoprano1 how can you be struggling when you have no rent or mortgage to pay ?
@@skyblazeeterno- certainly I’m not struggling as much as some, but it would be nice to be able to afford to replace teeth that have been, or will be soon be, extracted (for instance) so that I could more easily eat. Also, I’m currently supporting two of us on one person’s state pension. Luckily I don’t mind wearing worn out clothes and shoes, and I have Outer Hebrides genes so don’t need the heating on beyond 16°, I could eat nothing but slop, so yes, you’re right I’m not struggling.
Property ownership is the biggest lie ever told and now Starmer making it a flag ship policy. God help us.
I agree, when I see people take out a mortgage. It reminds me of credit loans on steroids with high interest rates on top. The elites are not stupid when they loan money out like that lol. Unfortunately some of the middle class here don't care.
so you think being a renter all your life is the way to go?
@@blobtv7444 capitalism encourages us to speculate with the house we live in. Surely humanity should be happy to have a warm abode to live in.
@@karlkerr7348 The two are perfectly compatible, because I have speculated I now have a much larger warm abode to live in.
@@blobtv7444 yes affordable rents. Many people rent around the world 🌎 even in Capitalist USA 🇺🇸