Ai Will Destroy House Prices Forever Fred Harrison

TITLE: AI Will Destroy House Prices Forever — Fred Harrison Explains Why Nobody Is Telling The Truth CHANNEL: Fred Harrison DATE: 2026-05-02 ---TRANSCRIPT--- Hi Fred.

Hello Peter. Good to be with you this Friday. Well, there’s been a lot of talk about house prices lately and I’ve seen a lot of pundits speculating that AI could actually push house prices higher. You know, AIdriven wealth, new productivity, better markets that AI can help match sellers there. So, there’s a few people out there telling us that EI is going to push up house prices even higher. Well, you as the um UK’s greatest house price pundit, shall we say, what’s your view on house prices with AI? Well, you what you’ve articulated is a fraudulent uh description of the impact of AI on the total economy including the house prices. And the bottom line is that as things are today, house prices are just not going to recover. They will progressively decline to some bottom that we don’t know about just yet, but it’ll be in a cesspool uh a quagmire uh stuck uh the future looks pretty bad. But to understand why that is so we have to look at three levels of activity. uh involving AI. Uh the in the economic one is that the economy will implode as people are laid off. Uh other firms will compete with the increased productivity of their competitors by laying off more workers and using more AI. And that will be a cumulative uh effect embedding [clears throat] AI deeper and deeper into the economy which means more and more people are shoved out of work. Uh the downward spool uh has no end in this scenario. Okay. So what? Well, now we turn to government. If workers are losing their jobs, they’re they’re not earning wages, which means governments can’t collect income tax. If workers are losing their jobs, they’re not spending money in the shops, which governments are losing taxes on sales like value added tax. If the economy is imploding because the workers are losing their income and are not spending, investors will reduce their investments in capital formation which governments are going to lose taxes on capital. So now we have not just a declining labor market but a declining revenue in government funding. How is government going to spend money on the public services if they are losing revenue from the income tax, from sales taxes, from prop profit taxes? What we’ve got is a cumulative downward spiral in governance and then we have the general social implosion. The loss of wealth means the cut back in welfare. This creates discontent among the people who turn to autocracy uh to try and relieve their frustrations and we end up with a general scenario of chaos. Now in that scenario, nobody’s buying houses. Prices are going down. People who really need to sell have to slash prices. People with mortgages discover that they can’t fund their mortgages out of their welfare benefits which are being cut by government because the government is losing revenue. Government resorts to printing money which creates inflation which pushes up prices which means that people on the lowest incomes are even [snorts] further excluded from the consumer market. We just have one great turmoil and in that situation there is no prospect of housing uh recovering either in the construction sector because who’s going to buy the houses uh or in the market for letting properties or the sale of houses that already exist. uh the market just depletes, collapses and under the current system I’m stressing that there is no way back because as AI takes deeper and deeper hole there is a cumulative effect employers uh dash to use more and more AI to be able to cut the costs of employing people and raising their productivity. But raising their productivity forces their competitors to go one step further by sacking even more people and replacing them with AI. Where’s the end to this dark scenario? There isn’t one under the current political system. So those who are optimistically talking about oh productivity will go up and that will boost prices uh are talking through their you know what they they’re just not they’re just not realistic. Absolutely Fred. So that analysis is just not getting out into the mainstream media at the moment. We don’t we we don’t know how to solve this problem that you’re predicting and what is the solution to this doom loop that we’re now seeing unfold in house I mean I’ve been looking at house prices and you’ve got to unpick what what the housing the the property cycle that you predict is here [snorts] to cause a house price crash anyway. But the AI doom loop as it unfolds in our economy. I mean I use AI every day. I used AI today to analyze CVS and it was way better than an HR department. I mean the analysis I got was of a level that was so higher than what I’d get from an HR department. It was unbelievable. You know I’ve asked legal advice today on some issues. Again give me something better than a corporate lawyer could. it is really going to make a difference. So, but we know this AI thing is going to ex it’s going to keep on driving our economy. So, what’s the solution? How do we save people’s lives in this world where AI is here to stay? Well, uh I come back to my favorite topic, but let’s start with what some people are saying. In [snorts] this circumstances, what we need is a wealth tax. A wealth tax on the rich guys in Silicon Valley. Well, we know from history and the comparative evidence across all countries that a wealth tax doesn’t work. The UK has the highest wealth taxes uh of those few countries that can be said to have wealth taxes and they amount to just 3 [snorts] and a half% of total national uh revenue. A wealth tax penalizes people who actually add value to the economy and therefore diminishes the impact on those who are using their assets just to extract value out of the economy. So a wealth tax is is a red herring. We what we have to do is control the introduction of AI so that we can glean the benefits of the sort you’re referring to but in a controlled way. At the moment it is completely out of control. the the halfozen guys in Silicon Valley are pouring hundreds of billions of pounds into speeding up the uh uh growth of what they call [snorts] super intelligence which will eclipse humanity’s brain power. If the creatures, the humanoids reach the point of effectively independence from human beings. They’re going to create a universe of their own and they’re not going to care about human beings. There’s no prospect of them showing empathy because they don’t have empathy. They don’t have a moral conscience. All they have is the hard data that we’re investing in them of the kind that has led to intelligent drones dropping bombs on families asleep in their apartments at night. We see this on our television practically every night. The only way to take control of the AI uh project is to charge for the use of the natural resources. The one of the biggest values would be from the location of data centers. These are where all our data has been poured in. Uh some people say yes but if these data centers are in marginal locations they’re of low location value. Ah yes but the energy required to sustain these data centers is phenomenal. Pretty soon the humanoids will be competing with humans for the energy that we need to warm our uh bodies in winter to cook our food and such like. A charge on the energy that goes into the data centers, a rental charge diminishes the the scale of the operation which at the moment is just out of hand. Even if the data centers are in marginal locations, they’ve got to transmit the data to the centers of high economic activity either through copper cables under the ground or through the radio spectrum. the full rental collection of that those rents would lead to a huge amount of revenue uh for government to replace the lost income taxes from unemployed workers uh and so on. We would now alter completely the uh scenario as faced by investors in artificial intelligence. Suddenly it’s now more fruitful, more profitable to return to traditional sources of investment because they’re losing all the profits that they’re currently accumulating uh from the AI revolution. This reduces the rate of development of AI and now we can understand how to channel the benefits in a controlled way so that we control the robots not the robots controlling us which is what is actually going to happen. Uh it’s only the natural resource rents collected uh at the rate of 100% that will channel the wealth into the national treasuries which then becomes revenue to support those who lose their jobs. So, it’s not a bleak picture, but it’s only an optimistic scenario if people understand that there actually is a solution. But if people don’t know that there’s a problem yet, they’re not going to look for the solution. So, there is the conundrum. How do we persuade people that we have an existential threat hanging over humanity, but that that if they wise up the the Yes. A shift to in the structure of public finance away from income taxes and profit taxes and wealth taxes onto rents will diminish the capital gains on people’s homes, but they’re going to lose those anyway. And there’s no way back to the capital gains that they’ve been accumulating up till now. We need to create a new fund of wealth that will support the people everybody equally in old age in uh the unhealthy people who need welfare and so on. So a complete rethink of the social system is needed and that means that people have to start thinking out of the box otherwise uh my scenario of no way back I’m afraid and that’s monitored by house prices they will collapse and stayed collapsed people will lose the capital gains that they thought they were going to uh use in their old age and there’s and and there is no possible optimistic scenario uh to address the AI revolution under current policies. Absolutely, Fred. What I find most worrying is a lot of the people who are pushing AI have managed to capture government. We see um President Trump’s Warp Speed Project and governments, they’re all slashing property taxes. They’re giving special low rates for access to water and electricity. There is a global race to the bottom to actually reduce the rents of our new AI data centers. And this is going to make the problem even worse when what we should be doing as you’ve said all of the economic rent that is needed by the transmission of information you know it’s it’s getting all over the world I’ve looked into this a lot of the data centers are being put at places where there’s already government spending that’s put in these huge optical fibers to Washington and New York and they’re now putting the data centers where that connectivity has already been paid for by the government and they’re taking that free money and that that means less for us when our jobs start reducing and when the economy changes. So your message has to get out there. Data centers, AI companies have to pay their full fair share of what they’re taking from the rest of us. Is that a way of explaining it? Uh that’s correct. And of course, many of the data centers are being uh parked into places where the local communities are already suffering from a shortage of water uh and uh inadequate infrastructure. So they will be finding that they’re competing with these data centers uh wi with the risk that the water that they have at the moment will be polluted by what the waste that comes out of the data centers. So the environment will degrade at an accelerated rate. So we have an accumulated doom loop, a feedback loop that uh spreads across not just civil society but nature as well. And that it’s a tragedy because the digital age ought to be a great innovation that improves the quality of people’s lives, reduces the working time that that we spend at work, but not our wages. But it can only be done if we’ve got the balance of public policies right. And at the present, governments, as you say, far from being wise about what needs to be done, are actually amplifying the problems with the policies they’re adopting. It’s absurd. It’s insane. Uh, and the public’s just got to be awakened and and take a grip, a control, otherwise We’re up the Swany River. We certainly are, Fred. I mean, it’s it’s frightening how stupid our government is. This reliance on taxing people’s wages and the exchange between us and our investments when there is so much revenue the government could had if it used economic rents and it’s the only way they’re going to protect us against AI. So this is the message we need to get to everybody. AI could be a benefit for humanity. And it’s not because AI is going to invent terminators to shoot us with laser guns. It’s just AI is just going to make our cost of living higher and we’re not going to have the money from work or a lot of people are going to lose their jobs, winners or losers. But it means we can’t raise revenue for the government. Yeah. Uh, a few days ago the this the boss of a bank uh and put out a public statement saying that governments will lose all of the income tax revenue uh because workers will have all lost their jobs. Well, think of it losing all of income tax. What what are governments going to do? And yet there’s no fireworks in Washington or London or Paris saying good God if there’s any if this is remotely accurate uh we’re we’re facing a call it a revolution turmoil catastrophe but how can a government survive if the main sources of revenue are dis going to be disappearing at an accelerating rate they’re going to have to abandon all their policies, their spending policies, which means the most vulnerable people will lose out first. Uh, and it the turmoil that one is forced to start to imagine is well, it’s be it’s beyond imagination at right now, but that’s it. We need to start imagining the worst in order to shift public policy to achieve uh the stability that is possible if there is a political will and that political will has to come from the public not the politicians. Absolutely. So, if we don’t shift our taxes onto economic rents of all types in society and and people’s use of of energy and pollution and environmental degradation, we’re going to end up with some kind of uh sci-fi dystopian nightmare of people in poverty with little access to education or health care and no investment in communities. We already are seeing this with our water and our sewage problems with our electricity. You know, people don’t realize that we’re very close to um points where we can’t supply energy. We haven’t got the infrastructure. So, the infrastructure and um investment is going to retreat, go down and down. People’s wages and there won’t be any government to support them. And that’s what we will have if we don’t have economic rent revenue in government policy. And then if you add to that events like what’s going on Iran, uh the uh resources needed to uh produce food are being denied. So food production goes down. the migrants out of subsahara and Africa push into north uh uh Europe. All of it comes together in one big collision which is what I’m predicting in in my book that that comes out uh later this month. the the grand collision of all the existential threats. Uh, and they’re all visible now on our TV screens. There’s no mystery about it, but people aren’t seeing the under underlying logic of what’s happening. And that’s because they’ve not been allowed to understand how this concept of the net income, the income that we all hope to produce over and above what we need for our personal needs, ought to be channeled into serving the common good. But for ages it’s been extracted out of the economy, invested in wasteful projects. Uh and we’ve lost the resilience to survive. That’s where we are today. It’s a terrible situation. Now, um Fred, you’re going to be launching your book later this month. Um, now I heard it’s there are um places to go to the book launch. Can you tell us where that’s going to happen? Uh, yeah. If you go on to the Shepherd Woolwin uh website, uh you will see the announcement of the location in London. If you can’t make the meeting, you can uh log on uh via Zoom for the event on May the 16th. Uh and uh the book will then be out and the full horror of our future, but laced with the optimism of how we recover if we become enlightened, if we have a new enlightenment. M this time in properly informed enlightenment uh can offset the terrible fear of the the panic that will set in once people see that what we’re on is a treadmill and there’s only one way uh down on that treadmill and it is down. M I’ll put the link in the comments and in the description for both the Zoom link to your um online and if anybody wants to go in London um and see you um give a speech about talk about your book. Um it’s um Oh, I do you mind if I give a little plug for my own thing, Fred? Please do. So, I got published in British Wildlife this month in the April edition which came out a couple of weeks ago and that’s basically telling us what’s happening with British wildlife and it’s the same story. It’s exactly the same story. The government released uh this week its reports on wildlife, all the statistics of how much and it’s just getting worse and worse and worse and we have more and more schemes to protect wildlife. You know, there’s more and more grants and yet wildlife is continually declining and it’s getting worse, not better. And everything tells us that the problem is that land values are going up and [clears throat] the money we spend isn’t protecting wildlife and more pollution’s going into rivers. And if only we thought, well, why don’t we tax people who use that land? Why don’t we charge a fee when somebody degrades land? Why don’t we tax that pollution going into the water? And then all these companies who are, you know, making a lot of money, well, they’re going to now go and clean up the rivers. They’re the ones who are going to say, “Well, I’m going to efficiently use land and and we we can leave some to wildlife and and so exactly the same thing.” So, if anybody if any real wildlife people out there, um, they can always get in touch with me and I’ll sell them a copy, but they can bribe British Wildlife. It’s a it’s a really good magazine for the serious naturalist. So I’m quite proud of that but I don’t publish often. So there we go. My congratulations. It you’ve described ex uh ex exactly one of the cumulative impacts of bad public policy in the realm of nature. We’re hollowing out nature in the same way that we’re hollowing out what I call the social galaxy, the the space that human beings occupy. Uh so I it’s a perfect uh catastrophe all aspects of life colliding converging on one uh time scale. Uh and I fear for the future. Yeah. There’s an interesting theory that’s talked amongst us rewers. You know people in the reing movement. We talk all about the shifting baseline theory and the shifting baseline means we look out the window and we see the birds and you know what’s going around and what nature but we don’t realize that you know when we were born there was a lot more nature out there but we don’t think about it because the b what’s in our minds shifts and we’re doing that with public services with um education with the you know all kinds of quality water quality all kinds of things in our life that baseline is getting worse and we’re not noticing it and it’s all because we’re on this treadmill of allowing the private extraction of these economic rents while we are paying ever more tax and ever more cost or all these monopolies that surround us. Exactly. So either the public uh awakens itself and understands how the economy actually works. Uh or we’re in for Well, you tell me what we’re in for. It’s it’s it’s horrible to be a doomster. You know, this shouting out the ended nigh. Well, if people actually knew Fred and I, we’re remarkably positive people who love truth and analysis. You know, we’re not here to scare people into the but it’s it’s the only thing that is going to get government’s change because the forces within government are so captured by the people who make the rents by the people who earn without work. You know, they extract money from others. They are the parasites. And those parasites have got utter control of all of our political parties. The process has come to an end. There is no escape route. We either build rationally out of it or we pay a terrible price. So, uh it does sound grim. On the other hand, the solution is available. There’s there’s no doubt about it. It’s been uh authenticated by scientists. Uh there are even some uh empirical ex uh cases in the world to point to. Uh so there’s no mystery. We’re not talking about a fantasy solution. It’s a problem of deep-seated prejudice in favor of the current regime. And that’s what we have to somehow overcome the psychological barriers. So we just have to keep on with our discussions and hope that it helps people to gain the enlightenment that they need. So we want every all our viewers go back to your work, talk to your family, start talking about cheating, how people are cheating us and you’ll find out more about that in your book link in the comments and description. Thank you Peter. Thank you Fred and good night. Good night.