How mortgages work

Note: this was filmed in 2023 when the Tories were the government.

UNDERSTAND, SHARE & PUSH BACK

SUBSCRIBE, SHARE & START A CONVERSATION

Performed by Gary Stevenson
@garyseconomics

[SoMe_YT]

The problem is that property has been allowed to become monetized, it is just another asset that can generate income, rather than being seen as a basic human need.

[don-jprs]

Inequality is happening because of 2 reasons:
1- debt = fixed interest = mortgages
2- not taxing wealth

[JW-ytlr]

Stop people owning more than 10 properties . Anyone owning and renting out more than 10 properties should have to register as a private housing association and have to maintain the properties to a recognised professional standard . Rents would have to be realistc, and tax would need to be paid appropriately . No ' charity status ' get outs

[maverickuk]

Mortgages in Britain don't work by borrowing money from the rich. It's much more sinister than that. The bank which decides to "lend" you the money to buy the house, creates the money from nothing at the point of signing the mortgage agreement. No money is taken from the bank's balance sheet at the point of the loan agreement being signed. This is insane, obviously.
Banks being able to create money from nothing is a massive part of the problem.
Want to remove virtually all debt from a specific country? This cannot be done while their respective Central Banks still exist.

[georgedobinson]

We would be so much better off if busniesses weren't allowed to own more than 1 residential property and private ownership is limited to 5 residential properties. If foreign investors were forced to either live in the homes they own here for 66% of the year or sell it within 100 days, there would be enough properties to go about instead of the artificial scarcity we have now

[vonder]

The housing market is insane, I know a couple - a teacher and a nurse who bought a house for 280k in 2008 in the suburbs of London. Now it’s worth over 1.2M meaning you need a salary of 250k gbp plus to afford this ordinary house in on a 30 years mortgage. You basically have to be a hedge fund manager to afford a modest teacher / nurse home these days. Of course you are taxed 50 percent on that salary - “because you are filthy rich”. Broken system. Of course the couple now retired don’t pay pretty much any tax even though they are very wealthy, at least on paper.

[michaelcorleone]

Having a mortgage doesn’t make you a “homeowner” the bank owns your home, you’re just paying off a debt to them every month.

[paulyloveyou]

I find it shocking that people don’t get the basics in life

[johnburrows]

Before Thatcherism a house was just a place to live. Sadly, as we've become de-industrialised, money has gravitated to assets and the necessity of property has become just another asset class. I recall when a footballer retired in the 60's /70's, they would by a business, now they just buy properties.

[sunnilau]

Love your views about UK economics Gary! The fact that in the UK, the banks typically only lend borrowers 4-6 times salary, the amount of debt is already comparatively low compared to many other countries. I still don’t understand how normal people come up with the down payment here🥲I’m from Hong Kong, the banks would lend us 70-90%

[cliffhughes]

You don't really own your house, the mortgage company does. And it owns you too.

[keepcalmandcarryon]

Just finished your book. Thanks for speaking out.

[SEANPOL]

Spot on Gary. Mortgage’s keep most enslaved to the wealthy for our whole lives

[dannywhite]

House prices rising being just a fact of life is mad to me. No one ever question it but with pretty much everything else you own in life the value goes down as it degrades, but properties go up because of supply and demand.

[TheWorldBelow]

So much for Justice and the pursuit of happiness. Unless you’re criminally minded and have no qualms about the suffering of others.

[headab]

Same as rent - which is even worse, especially now that corporations (REITs) own and run buildings. Here in Canada they are so powerful, they basically lobby governments to get rid of rent protections. They are buying up older affordable rental stock owned by individuals who were not so absolutely cruel

[electricyouare]

The reallest asset in the world are the people working everyday. And they know. Payyyy your interessstttt.

[Google_Does_Evil_Now]

Gary, what are workable options to reduce house prices and mortgages?

[AmritSinghAuja]

Start a podcast, your content and knowledge is amazing.

[hmson]

Read the article about Gary in the FT today.
Gary, they are coming for you now!!!