Welcome back to Gary's economics.

Today, we are going to explain how you lose your house.

Alright, I wanted to do a video that explains very explicitly

how you lose your house.

Because we exist in a country

and in the world, in fact, of rapidly growing wealth inequality.

And yet when I talk about this,

we often see a number of people saying, well,

you know, I own my own property.

You know, I'm going to pass my property on to my kids,

I'm going to get my property from my parents.

So I don't want tax to be raised because, you know, we're okay.

We've got property we're going to protect that.

The reality of the situation is

that ordinary families are getting poorer.

They losing their wealth.

So I want to explain explicitly how that is happening.

So I think the first thing to say is a big part of this

dynamic is basically about two different

mentalities and attitudes towards wealth building

that differ across generations.

So my parents generation,

my parents are born in the late fifties, early sixties.

They were part of a generation

which was unusually able to buy property

with the money they made from working.

Back in those periods of time,

the average property was only sort of two

or three times income in many places.

Interest rates were high,

you could save up money, build some interest,

buy property relatively easily.

So these people lived in a world

where if you were willing to, sort of,

work hard and save up, you could buy property.

The world has changed a lot since then

and younger people nowadays live in a world where it's increasingly

almost impossible to buy property without a big inheritance

from your parents.

So what this means is

there's a kind of a disconnect

in understanding between generations here.

Which is the older generation, which still owns,

in many cases, a decent chunk of wealth in terms of housing.

They think that the younger generation

will be able to buy their own homes,

but that is effectively impossible.

So what that means is

the older generation is thinking, well,

I'm going to use this money to,

you know, basically pay for my my end of life care,

hoping that,

you know,

and their retirements, hoping that the younger generation

will be able to buy properties on the back of their own work

which is impossible.

So what you then have is the older generation

releasing the equity in their homes,

selling their homes, using equity release schemes

in order to pay

for their retirements, pay for their end of life care,

thinking that their kids will be alright

because they can buy their own homes and then the kids

can't buy their own homes essentially.

And the kids are left in a situation

where the only way to buy a home

is to take out a really enormous mortgage

or basically to rent for their whole lives.

So I should add, you know, my grandparents,

all of them own their own property,

and they've all passed away now,

and none of them were able

to pass significant amounts of equity down

because that money was basically

all used to pay for their end of life care.

Increasingly, elderly people are living into their nineties.

They have to pay for end of life care for a long period of time.

It's very expensive

and this is essentially the way in

which ordinary people are losing their houses.

But, the question I always ask is, you know,

the amount of housing is not decreasing.

The amount of debt adds up to zero.

So if ordinary families are owning less homes,

using more debt,

that can only mean that the rich are owning more homes

and having increasingly large amounts of money owed to them.

So in a sense,

the lack of home ownership

and the increased indebtedness of ordinary families

is a manifestation is in fact the exact mirror

image of this rapidly growing wealth of the very rich,

of the very rich that I talk about.

So, you know,

I think maybe people sometimes think I'm just sort of hate

rich people.

I am a rich person. I don't hate rich people.

But if you are allowing the wealth of the rich to grow enormously

at a time when the economy is not growing,

the only way that that can happen

is that the wealth of the middle classes

is being moved over to the rich.

And that can only happen if ordinary people are losing their homes.

And, you know,

I wanted to connect this to, we’ve

been speaking a little bit about tax in some of our shorts.

The reality of the situation is

most ordinary families

are going to lose a significant chunks of their

property wealth in order to pay for end of life care.

And through that mechanism, ordinary families will become poorer.

They'll lose their assets.

You know, one alternative to this would be to tax very rich people

who are seeing the biggest

and fastest

ever increases in their wealth in history,

tax them more to pay for a government funded care service.

And then in that case,

your dad, your grandad, you know,

you yourself, when you’re old wouldn’t

need to sell your home

in order to be able to live a dignified life in old age.

So I think people often instinctively think we need to reduce tax

to protect my wealth.

But we do have an alternative,

which is tax the people who are increasingly

going to own your wealth to pay for the things that you need.

I think we need to address the reality of the situation here,

which is

ordinary families are losing their wealth.

Rich people are gaining it.

And tax can be used

as a defense, as an alternative, basically, you know.

If we tax the wealth back

from the people who are taking your wealth,

we can use that to give you the things you need,

which you will otherwise have to sell your home to afford.

You know, I talk about a lot on this channel.

It's very important to understand the flows of wealth, understand

which groups are getting richer,

which groups are getting poorer

at the moment is ordinary families

who over

the generations are getting poorer, generation after generation,

going further into debt and in fewer houses

and having lower standards of living.

That wealth is going to the rich.

The only way to reverse that is to tax the rich more.

We're going to campaign for more on this channel.

Tell your friends, tell your family, send the video to your mum,

and hopefully we can make a change. Thank you.