Property Prices, Wealth, and the Future of Housing - Rory Sutherland

[@thumper1747]

Rory is the kind of thinker Governments need to listen to and with ideas they should implement ASAP!

[@peterbylund-cloonan7053]

Great interview

[@jimbo4375]

Rory Sutherland is my spirit animal

[@Ittakesonelifetolearnhowtolive]

This is an incredible interview. Thanks for this.

[@weeksy79]

20:45 this describes Surrey perfectly. Mansions with Nissan Micras in the drive and Terraces with Porches parked on the road

[@thumper1747]

Just been reading the comments. There’s a disproportionate number of critical thinkers and articulate people listening and commenting on Rory’s points here! Very encouraging! If only public policy was as adept!!!

[@DineshJ]

awesome interview...wow!

[@jakubjodlowski8416]

This is incredible, I can’t believe no one commented yet! Thanks for this guys. Super interesting

[@grantbeerling4396]

0-15 mins; As a housing researcher, for once, the correct quotes on Adam Smith, John Stuart Mill and Marx all saw and calculated the rentier Landlord as creating nothing new; they take the surplus from productive labour with no restraint (free market economics bundling Land in with Capital) ) of regulation/taxation with constant adjusting of rentable value to the high utility value of a roof over your head, i.e. everything, meaning people will go without heating, food, electricity to pay the rent. The land is a natural monopoly of place and time. (Winston Churchill 1909 Edinborough speech on Land Monopolies) The land values of the Duke of Westminster properties in London are high because of the closeness of commerce in the 21st Century. That land is not a product that can be created, packed up, and put elsewhere; that would go against the laws of physics of time and place. The way to control land values ( and again, it is great to hear someone who understands the make-up of house prices; Land Value (LV) and Construction Cost. Note in the 1930s, LV dropped to 3%, and the average now in the UK is 70%, and in London, it can rise above 90%) is to control the expected growth in rent values, which relates to the property's value, determining the rent needed to beat the other forms of investment. In this case, rent increases always affect property prices as the need for a 3-5% yield (depending on inflation, which relates to interest rates in the present monetarist set-up) is required for an income for the landlord. Otherwise, put the surplus in gov bonds, stocks and shares, which people did between the 1920s-1971 and 1973-1980). This is a complex subject, and it turns out the issue is not that we don't have enough houses (we have pretty much the same per capita as in the 1970s when, in some areas, there was a surplus, albeit slums ready for demolition), but that we have the wrong demographic living in the wrong type of house (ref: the Oxford academic geographer Danny Dorling; All That is Solid). If the Private Rental Sector (PRS) returned to 7% of the market share (presently 19%), this would free up 4 million properties without building one more. When Landlords exit the market, they don't destroy the property; it changes hands to either an owner occupier or back to the local authority/housing association. In the 1920s, the sitting tenants purchased one million properties from their landlords as yields dropped due to rent controls (1915-1988). What landlords and those who followed the law post-1996 entering the buy-to-let market should be angry about is that this idea was a) to inflate the housing market by creating scarcity for first-time buyers, b) further caused the end of government welfare to asset welfarism, great if you have an asset, work till you die if you do not. Now, many middle-class children are entering the workplace with wages that, in real terms, are 35% lower than they should have been in 2024 compared to 2010, and they have no hope of ever buying a property where there is well-paid employment.

[@stevo728822]

80% of the value of a property is location. 10% is size. Another 10% is condition. It's the location that determines access to facilities, security, climate, neighbours, sanitation, pollution and transport.

[@slavmarin7827]

thank you!

[@mrblack888]

All the professional "solutions" amount to families taking a massive loss on their house and being told, that's too bad, it had to be done. How about the banks take the loss and they go bankrupt instead? And the wealthy who have been profiting off this obscene land price increase take the loss? Seems to me that those who made the profit should wear the loss. Cut land value and cut mortgage value by the same amount.

[@leonie3317]

Well it wouldn’t be a massive loss it just might be that there isn’t a presumed 10-20% increase in value for no reason other than time passing.

[@mrblack888]

@@leonie3317 Most banks only hold 5% reserves. Cutting land price in half means wiping them all out and sending all stocks and shares to zero. The banks would then have to be reconstituted under new regulations.

[@armandbarbe1812]

The tulips were the bitcoin of that day.

[@bobmarleyfify]

Bitcoin and the Tulip bubble are nothing alike.

[@stevo728822]

The Tulip Bubble was largely a fabrication by a single author.

[@clivecowlard7098]

All the discretionary income in England goes into property values All the discretionary income in India goes into weddings All the discretionary income in Mozart's Austria went into funerals The Hapsburg emperor Joseph II put an end to that Mozart ended up buried in a common grave His music survived

[@alexb5815]

Consider where the demand for all these houses is coming from to build over most of the U.K. including the green belt and it seems a very bad idea

[@merlin8675309]

Aesthetics (like pools here in the US) don't dramatically increase the sales price of a house. What they do is help the house sell faster in down markets. Its risk mitigation instead of value.

[@skyleonidas9270]

But actually it is interesting that inequality of inheritance bothers people in relation to their culture. In many cultures the eldest inherits all and this is considered normal.

[@tomatobrush3283]

I rented a house in Upminster where houses are close to a £1 mil in value. I met the neighbour he had paid off the house many years ago. I said to him, why don't you sell the house and cash in and then you can live off 800k in cash for your retirement. He said, where will I live, I will have to try and get a mortgage and banks won't give me a mortgage, so I will have to buy cash, then what can I get that is close to living in his nice house in upminster for the money. His family visits and they have a lovely time in their huge back garden with their life style. Why would they want to be cash rich and yet live in a shitty house.

[@Howt-ooo]

Watch "Garys economicss" !!!!!!

[@stevo728822]

The rich today are living very similar lives to the rich of 100 years ago. Mansion houses, large grounds and gardens, horses, Bentleys, holidays to the south of France, yachts etc. The rich had these things 100 years ago. The poor today however are living very different lives to the poor of 100 years ago.

[@noahjohnson8740]

I think you missed the point - did people 100 years ago have TV? Air conditioning? Bluetooth speakers? This stuff hadn't even been invented then, but even in a stretch of 20 years or so those types of products have improved vastly.

[@stevo728822]

The retired keep their big houses because they want to leave it as an inheritance to their children. There's no Capital Gains Tax on your primary residential property.

[@stevo728822]

He's very big into restaurants. Not so much gyms.

[@weeksy79]

Is this fake? I’m so confused how you got this guy with such low views? Or KZbin not primary platform?

[@atelier27]

Maybe he just asked him? Sometimes people are willing to do interviews with smaller channels.

[@weeksy79]

@@atelier27have watched more now and yes does seem like maybe he just loves doing this kinda thing!

[@smarterproperty6378]

Get a decent camera.

[@slavmarin7827]

thank you!