The UK housing market is a ‘Ponzi’ scheme – as anyone at the bottom of it knows

William Gale of the British Home Group has likened the UK housing market to a ‘pyramid’ or ‘Ponzi’ scheme. With the UK housing market benefitting a shrinking minority of the population, it’s easy to see how he came to that conclusion.

UK housing market: the great pyramid

Gale is the founder of the British Home Group of companies, which includes British Homebuyers and British Homesellers. His biography states that his companies have “overseen more than 14,000 property transactions worth over £5 billion”.

In his latest video, Gale notes that the “housing market only really works if new buyers keep paying higher and higher prices” and that “these higher prices are becoming more and more detached from average wage growth”. He likens this situation to a ‘Ponzi scheme’, which is technically different to a pyramid scheme, although both require growing numbers of fresh blood to feed the asset vampires at the top. Gale also uses an image of a pyramid to emphasise his point:

Gale notes that:

Some areas are seeing house prices literally 10, 20, 30 times average income. So what the hell happened? Wages adjusted for inflation have flatlined. Productivity growth has slowed down significantly since 2008…

So, what changed after the 2008 crash that saw productivity stagnate, living standards fall, but nominal house prices skyrocketing? One thing, my friends, cheap money. After the crash, interest rates were slashed to historic lows. If you can borrow more and more with the same monthly mortgage payment, you can afford to pay more for property. That meant more money chasing a housing supply that was not growing fast enough.

And then came the investors… landlords can borrow not just against their salary, but against rental income potential. That meant even more capital flooding into the system at rock-bottom rates. So just like a Ponzi scheme, yesterday’s buyers only profited because new buyers today were willing and able (due to lower interest rates) to pay even higher prices.

uSwitch reported on a study from Confused.com which shows the pyramid like nature of UK house ownership. As you can see, a smaller percentage of the population are owner occupiers, but of those who do own their home and live in it, more of them own the house outright:

Increasing house prices make ownership unaffordable to many, which means more and more people have to rent. As the UK lacks useful rent controls, this puts Britons at risk of predatory landlords, as James Wright highlighted for the Canary in July 2025:

Landlords have hiked rents by up to 31% over the past three years, according to a report by Zoopla. At the average increase that’s a £221 rise in every single monthly rent payment. It shows an already well-established housing crisis is only getting worse as the ruling class continues its obsession with money for nothing or ‘rent’, as it’s referred to.

There was also an average £218 per rise in monthly mortgage payments. But at least people paying that are getting closer to owning their own, if overpriced in an inflated ‘asset’ market, home.

Gale says the only reason the market hasn’t crashed already is because of young people inheriting money from ‘the bank of mum and dad’. He highlights a key problem with this – namely the fate which befalls anyone whose parents don’t have money to hand down. Gale puts it like this:

So is the housing market a Ponzi scheme? Maybe not in a legal sense, but in practice it sort of functions like one. Wealth is recycled upwards. Debt loads are rising to make it happen. And inequality between those with property owning parents and those without is expanding. It expands wealth inequality. The real question isn’t whether the market is a Ponzi scheme. It’s really whether we’re building as a nation a housing system that actually works for us the people, or are we just building another financial game?

‘The REAL reason behind the housing crisis’

Another person who’s focussed on wealth, inequality, and financial games is Gary Stevenson of Gary’s Economics. Gary is former trader and current economist who’s one of the UK’s leading proponents for wealth taxes. His argument is similar to Gale’s, but he goes further, making the argument that allowing wealthy people to horde any assets is crippling the country. As he notes:

So to explain why it is very very simple really I can do it in one sentence.

When you give rich people money they buy assets. …

if you were to give me a hundred grand… I would go that day and buy 100 grand of assets…and that is true for the vast majority of rich people

He adds that:

When we saw that rich people were gonna accumulate trillions of dollars, pounds, euros [at the start of the Covid pandemic], it should have immediately been extremely obvious that house prices would go up… nothing could be more obvious… If we give £1 trillion to the richest people in the country… of course house prices, and stock prices, and the gold price will go up… and for the basic simple reason you are competing with billionaires and multimillionaires for ownership of the assets.

As Gary makes clear, the easiest way to make money is to have money in the first place. You’ve no doubt heard the phrase ‘make your money work for you’; this is what that means. If you have money to spare, you can purchase assets then sit back and let the money roll in. Even when the mega-rich work in their own operations, do you really think they’re working that much harder than you are? We’re supposed to live in a ‘meritocracy’, so presumably the amount we all earn must correlate with the effort we put in, right?

Let’s think about that.

The average annual wage in the UK is £37,857 (2% lower than 2010). It’s not unreasonable to think that the CEO of your company is earning £378,560 each year, which would suggest they’re working 10 times harder than you – do you think that’s the case? The owner of your company might pull in £3.7m a year, suggesting they work 100 times harder than you – do you think that’s likely? The guy who owns the company which owns his company, meanwhile, could be raking in £3.7bn a year; do you know how much harder they’d have to work for that to be fair?

10,000 times harder than you.

Do you really think someone like Elon Musk – who spends all day tweeting – is working 10,000 times harder than you? Or do you think we live under a system which is designed to transfer wealth upwards from the hard-working many to the easy-living few?

Asset war

We recommend watching both Gale and Gary’s videos in full to get a better idea of the arguments they’re making.

In the UK and around the world, we’re fast returning to a system of aristocracy in which people’s worth is determined by the wealth of their forebears. The good news is there’s historical precedent for severing these people from their wealth, although it’s probably best for all concerned that we don’t let things go that far this time.

Featured image via picryl