Conventional wisdom suggests that the UK has a problem with house prices but the reality is that we have a problem with land. The value of land held by households has soared over the past two decades and is now worth more than double the value of the property that sits on top of it.
The UK’s dysfunctional land market and soaring land values have helped drive growing wealth inequality, create the conditions for a broken housing market, and are a root cause of an unproductive and unstable economy. Reform of the land market must therefore be focused on reducing the financial speculation that occurs in land and sharing the benefits of increases in land values for the benefit of the public good. Reform is essential if the UK is to be a more equal, more productive and stable economy. It is also vital to creating a better functioning housing market that delivers the affordable and quality homes the country needs.