The great property
The myth spun about Britain is that land is scarce. It is not
landowners are paid to keep it off the market
PUBLISHED 11 MARCH 2011
You may be owed compensation!
Modern British history, excluding world wars and the loss of empire, is a
record of two countervailing changes, one partly understood, one not
understood at all. The partly understood change is the urbanisation of
society to the point where 90 per cent of us in the United Kingdom live
in urban areas. Hidden inside that transformation is the shift from a
society in which, less than a century and a half ago, all land was owned
by 4.5 per cent of the population and the rest owned nothing at all. Now,
70 per cent of the population has a stake in land, and collectively owns
most of the 5 per cent of the UK that is urban. But this is a mere three
million out of 60 million acres.
Through this transformation, the heirs to the disenfranchised of the
Victorian era have inverted the relationship between the landed and the
landless. This has happened even while huge changes have occurred in the
42 million acres of rural countryside. These account for 70 per cent of
the home islands and are the agricultural plot. From being virtually the
sole payers of such tax as was levied in 1873 (at fourpence in the 240p
pound), the owners of Britain's agricultural plot are now the
beneficiaries of an annual subsidy that may run as high as £23,000 each,
totalling between £3.5bn and £5bn a year. Urban dwellers, on the other
hand, pay about £35bn in land-related taxes. Rural landowners receive a
handout of roughly £83 per acre, while urban dwellers pay about £18,000
for each acre they hold, an average of £1,800 per dwelling, the average
dwelling standing on one-tenth of an acre.
Britain urgently needs land reform, but there is a problem. The
"tenants" of between 30 and 50 per cent of the Home Island land
mass are unknown. I use the word tenant deliberately. Here's why. In a
written response to a question by Andrew George MP in February 2009,
Bridget Prentice, a parliamentary undersecretary at the Ministry of
Justice, replied, "The Crown is the ultimate owner of all land in
England and Wales (including the Isles of Scilly): all other owners hold
an estate in land. Although there is some land that the Crown has never
granted away, most land is held of the Crown as freehold or
Prentice omitted to add that, as the preamble to the Land Registration
Act 2002 put it, "the concepts of leasehold and freehold derive from
medieval forms of tenure and are not ownership". What this means is
that, in relation to land in the UK, we are all tenants on the basis of
the feudal superiority of the Crown, a superiority created in 1066 and
founded on legal norms that were created to uphold that same feudal
This expensive medieval legal miasma in relation to land might not
matter, if the confusion did not directly impinge on the size of our
homes and even more directly on the price of land, which can be as much
as 80 per cent of the cost of a new home. Both the size and the cost of
houses are predicated on the idea that land is scarce in the UK, but this
is a myth propagated by those with an interest in selling plentiful land
The home islands together with Northern Ireland are 60 million acres in
extent. It is estimated that there are 62 million people living on those
acres, giving every man, woman and child a little under an acre apiece.
An acre is a little over half the size of a standard Football Association
pitch, which is why that measurement is used here. Almost everyone in the
country knows what a football pitch looks like. Very few people know how
to visualise a hectare.
So, who wants the acre on the top of Ben Nevis? You don't have to go to a
Scottish mountain to find plenty of land, however. England, one of the
most urbanised countries in the world, has abundant spare acres. This is
because less than 6 per cent of the entire island of Britain - and 10 per
cent of England - is urban. Put another way, for every acre that is
bricks and mortar, home or business premises, nine acres are not. This is
not counter-intuitive. Most people understand it as they get out of urban
areas, big or small, and journey by train or car through some of the
greenest and most pleasant land on earth.
What runs counter to what you see is the propaganda, unremitting and
relentless, from the environmental and countryside lobbies, telling you
that the UK is a small and crowded island and that within 30 years the
last blade of grass in England will be concreted over. At the current
rate of urbanisation, which is about 14,400 acres a year, England won't
finally fall to "concretisation" for 2,014 years.
Behind the scare stories is a very simple financial fact: an acre of
rural land worth £5,000 becomes an acre of development land worth between
£500,000 and £1m once planning permission is obtained. Moreover, most
land granted planning consent is registered offshore and is thus
tax-free, or virtually so. If the true availability of land in the UK
were known, the conversion factor would not be quite so generous. The
true availability of land starts with who tenants or holds it
What we need in this country is a debate about land, informed by facts.
The obvious place to look for the facts is the three land registries of
England and Wales, Scotland and Northern Ireland. Here we encounter two
extraordinary but related anomalies: we have land registries that do not
record the ownership of land at all and a second Domesday book that did
record the ownership of all land in the UK but vanished. These facts are
First, the land registries. Most people think that this is where the
ownership of all land in the UK is recorded. They are wrong. Formally
created by the Land Registration Act 1925, the current three land
registries only partly succeed where a series of earlier attempts failed,
beginning in 1875. Before that, there were deed registries in most
counties in the United Kingdom. The effort to create a land registry
happened at roughly the same time as the publication in 1873 of the
Return of Owners of Land,
the so-called second or new Domesday
, a coincidence that almost certainly led to the failure of the
push for a registry.
The second Domesday of 1873 exposed the inequity of land ownership in
Victorian Britain - that all land in the UK was then "owned" by
just 4.5 per cent of the population, while 95.5 per cent of the
population owned nothing, not even a blade of grass. Domestic home
ownership was in its infancy at the end of the 19th century; most of the
land was the property of a very small network of aristocratic families,
most of which had dual links to the House of Commons and the Lords. Those
who owned everything also had political control of everything.
The second Domesday recorded the ownership - yes, the word used was
ownership - of at least 98 per cent of all land in the four countries of
the then United Kingdom: England, Scotland, Wales and Ireland. The
details of each owner's holding, name and address, together with the
valuation of any land of more than one acre, were recorded and printed in
four volumes running to 2,300 pages and containing 321,000 names and
addresses. The details of the owners of less than an acre were recorded
but not printed. And it was all completed in four years. The current Land
Registry for England and Wales is at least 35 per cent short of that
achievement after 86 years of trying, and in the age of computers.
The failure to record the ownership of land in the UK arises not from
failures by the staff running the registries, but from the way they were
constructed by lawyers on behalf of landowners. The land registries were
designed to conceal ownership, not reveal it. Shocked by the detailed
revelation of the actual acreage that they held, the great landowners did
two things. First, they refused to register their land with the new land
registry in 1875. Second, they had one of their own, the Hon George C
Brodrick, Old Etonian warden of Merton College and second son of Queen
Victoria's chaplain, the landowning 7th Viscount Midleton, damn the
Returns in his 1881 work, English Land and English Landlords. No academic
work relating to the Returns appeared subsequently until 2001.
By the early 1920s, the pace of urban home ownership in London and
throughout the UK necessitated an expansion of land registry activity.
This resulted in a series of land registration and land regulation acts
that reaffirmed the Crown's feudal superiority by creating two forms of
lease - for a term of years, or freehold of indefinite duration. The
structure passed into law in 1925; nothing significant has changed
With rare exceptions, ownership dictates how land is used. Those who now
"hold" the bulk of the acreage of the UK are extremely hard to
identify, almost entirely because of the defects in the land registries.
But they are for the most part the descendants - the so-called cousinhood
- of the great landowners of 1873. Among them are the current Duke of
Buccleuch, with his 240,000 acres, the Duke of Northumberland, with
131,000 acres, the Duke of Westminster, with 129,000 acres, and the
Prince of Wales, with 141,000 acres.
With ownership information missing, planning of any kind, whether
national or local, is extremely difficult. And finding out who is getting
the money is almost impossible.
In 2002, Michael Wills, then parliamentary secretary in the lord
chancellor's department with responsibility for the Land Registry, wrote
to the Liberal Democrat MP Adrian Sanders setting out the limitations of
- 1. The Land Registry does not record ownership of land.
- 2. It records two forms of tenancies: leaseholds for a term of years
and freehold tenancies of indeterminate duration.
- 3. It creates titles without recording the acreage of each
- 4. Its records are not kept in a manner which would enable the
registry to establish with any certainty what land was owned by a
particular organisation or individual.
- 5. The titles to only about 65 per cent of the acreage of England and
Wales are recorded; in Scotland and Northern Ireland it is 85 per cent
and 50 per cent respectively.
What the land registries do is record the freehold titles of the
domestic dwellings of the UK, and they do that in an exemplary way. This
is to damn with faint praise, however, given that domestic dwellings
cover three million acres in the UK at most. Those may be the most
valuable parts, but they still constitute only 5 per cent of the
country's land mass.
The 60 million acres of the UK are broadly comprised of 42 million acres
of "agricultural" land, 12 million acres of what is called
natural waste (mountains, bog, moor and so on) and six million acres of
the urban plot (houses, shops, businesses). When it comes to our homes
and the taxes we pay, only two of the three sectors are significant.
These are the taxed land where most of our homes and businesses are, and
agricultural land, which is untaxed and subsidised.
Many businesses are subsidised by the taxpayer, for various reasons - to
retain jobs, to improve technology, to keep businesses in the market. But
the agricultural subsidy is strange. Pared down to its essentials, it is
a permanent and unaudited gift from the taxpayer to the owners of rural
land. Introduced in America in the 1920s, in Britain after the Second
World War and in the European Union in the 1970s, subsidies were intended
to keep the agricultural sector viable and food supplies secure. In
practice, the agriculture subsidy appears instead to have become a
permanent prop to an unprofitable business as well as a free handout to
If the business of farming is profitable, why does it need the
subvention? It is most abused internationally by the United States, whose
farm subsidy regime distorts trade throughout the world, making it
impossible for many farmers in the developing world to enter
international markets, much less trade in them. But the EU, and its
member states, mirror every bad American practice.
In the UK, the average "farmer" receives between £18,260 and
£23,000 every year from the taxpayer for an average farm of 220-plus
acres, whether or not he or she grows or herds anything. There are no
current subsidy figures specifically for England and Wales, according to
Jack Thurston, a London-based expert on the subsidy regime. "The UK
government has refused to supply them," he says.
However, according to Andy Wightman, author of The Poor Had No Lawyers:
Who Owns Scotland (And How They Got It), quoting figures from the
Scottish government: "During the ten years from 2000 to 2009, the
top 50 recipients of agricultural subsidy received £168m - an average of
over £3.3m per farmer. Among the top 50 are some of Scotland's wealthiest
landowners, including the Earl of Moray, Leon Litchfield, the Earl of
Seafield, Lord Inchcape, the Earl of Southesk, the Duke of Buccleuch, the
Earl of Rosebery and the Duke of Roxburghe."
The crucial point is that the subsidy ultimately winds up with
landowners, giving them greater flexibility in relation to the release of
land for building homes. Wightman cites the case of Frank A Smart &
Son Ltd, a company that owns 39 farms in Speyside. In 2009 it received
over £1.2m in single farm subsidy, the largest payment in
The same company sold 18 building plots and six building properties on
one of its farms, bought for £300,000 in 1991, for £1.3m. It made a
profit of over £3.1m in 2008, and in March 2009 sold 24 plots of land
with planning consent for more than £2.9m.
This pattern is repeated throughout the UK. A subsidy originally intended
to help poor farmers winds up padding the profits of rich landowners
while keeping poor farmers in the developing countries out of the market
altogether. Is this the worst case ever of unintended
Together, homes and businesses in the UK pay as much as £57bn annually in
de facto land taxes, such as business rates (£22bn) and council tax
(£35bn a year, including stamp duty and charges). The subsidy of up to
£5bn that the UK agricultural sector receives comes from British
taxpayers, not some remote bureaucracy in Brussels.
In the UK, 90 per cent of the population lives on the three million acres
of the urban plot. They work in the remaining three million acres of
industrial and business land and live in an estimated 27.1 million homes,
18.9 million of which are privately owned and 8.2 million of which are
publicly or privately rented. So 90 per cent of the population has made a
deliberate choice and has paid for it, usually at double the cost of the
home over the term of the mortgage needed to secure it.
The annual cost of that choice in terms of tax paid by the 70 per cent of
us who are private owners, in addition to mortgage interest, averages out
at £1,851 per home. Those in rented accommodation pay no mortgage but do
pay some rates. People living in rented accommodation end up without an
asset, whereas private homeowners at least acquire an asset. It comes at
a very high cost, however, one that is subject to severe fluctuations in
The estimated gain on a UK house over the past 20 years, inclusive of tax
and mortgage, is less than 4 per cent per annum. Over the long term - and
most people change homes perhaps only once or twice in a lifetime - homes
turn out to be a very modest investment.
The financial crisis demonstrated the raw capacity of capitalism to
destroy or place entire economies at risk as well as to expel hundreds of
thousands of people from their home through repossession. The world
financial system had to be rescued by emergency state spending and the
imposition of taxes on entire populations and countries. A properly
functioning system should not require subsidy on that scale to save it.
Free-market capitalism failed because it suffers from huge design flaws.
It is inherently unstable and lopsided. And nothing in the UK
demonstrates this quite like the housing market.
Most land in the UK held monopolistically by large landowners or estates
follows the rules of what the American social economist Mancur Olson
called "hidden coalitions". How these work in the UK and their
impact on the housing market is very simply explained.
First, no one knows just how much land is available for development or
from whom it is available. The result is that UK homes are both the
smallest in Europe and the most expensive, with the land or site costing
a vast proportion of the value of the dwelling. From the perspective of
the 31 million people, or half the UK population, who pay direct taxes,
what we are doing is in effect paying an inefficient business - the
325,000 "farmer" holders, or 0.5 per cent of the population -
to keep hold of building land, further falsifying an already rigged
market. The finer figures are worse. Only two-thirds of UK farms are
owned; the other one-third is rented, mostly from the owners of the other
two-thirds. In effect, the agriculture subsidy goes to the 0.36 per cent
of the population that owns 70 per cent of the country.
If the 65,000 "farms" of under two acres are subtracted as
economically meaningless, what you have is 50 per cent of the population,
the taxpayers, paying 0.28 per cent of the population to hold the bulk of
the country's landed assets and to make those plentiful assets scarce.
The result is that the cost of a building site is two or three times what
it should be for 70 per cent of the population. This is Britain's great
When home ownership became endemic, two things happened. First, the
banks, highly monopolistic institutions with a profound lack of
understanding of money, as they recently demonstrated, commoditised and
monetised the most basic human need for shelter: our homes. But then
those of us who managed to buy a home and hold on to it finally had a
stake in the capitalist system. This was economically novel. It had never
The Domesday Book of 1873 records the beginning of private home
ownership in the UK - in effect, the beginning of popular participation
in the capitalist market system. No economist, not even Karl Marx, who
was still alive when the second Domesday was published, foresaw the
transformation that this would bring about. Marx thought that capitalism
would always be confined to a minority, and that the majority would be a
rent-paying proletariat. A superficial look at the second Domesday would
have confirmed this. That is how it was then, but it's not how it is now.
The transformation is fundamental to both capitalism and
Private home ownership destroys the notion of rent as a significant
element of the overall economic equation. The estate agent Savills
recently demonstrated what this means. The national debt, which we are
supposed to lie awake at night worrying about, is roughly £1trn. The
total value of the privately owned national housing stock is over £3trn.
The ratio of debt to equity in the housing stock is about 1:4. In other
words, for every £1 of mortgage debt, there is £3 of free asset
Back in 1870s, for a UK population then of 28 million, there were just
over 3.84 million dwellings, of which 703,000 were privately owned.
Between 1873 and 2010, the population multiplied by 2.2, but the number
of houses jumped more than sevenfold. The number of privately owned
houses increased to 18.6 million, a 26-fold increase, as the majority of
the population moved from landless to landed, from a waged proletariat to
an asset-owning democracy.
Today the great popular asset pile is threatened by tax addicts on one
side, acting for inefficient government, and defective bank-dominated
capitalism on the other. The banks, knowing the real situation about the
land supply market, that it is rigged and opaque, recently felt safe
enough to inflate a house-price bubble that showed reckless disregard for
housing's primary purpose - to provide enduring shelter for people. That
problem could have been contained eventually by normal domestic fiscal
adjustments, no matter how brutal. What no one allowed for was that the
banks, the masters of money, would blow a second, and even more
destructive, asset bubble in their own basic commodity, money.
The banks created fictional assets and ran a bubble market in these,
using other people's money. They incinerated about half the global stock
of money, other people's money. When the banks' internal bubble burst, it
left no assets, just worthless paper. The property bubble at least left
some habitable assets behind. No matter how financially damaged,
something could be rescued from the crash in house prices. The only
rescue available for the banks was for money to be printed and for a lien
to be taken on the entire nation's taxes for the next ten to 15 years. We
owe the banks nothing except our debts.
What we urgently need is a clear, simple and logical land registry in
each of the four nations of the Union, with all land ownership recorded
and the names of the owners indexed, as at the present Scottish land
registry, and with the acreage stated.
In parallel with that change, we need formally to extinguish the Crown's
expensive, legally meaningless and complex feudal claim to all land in
the UK, a claim that was informally challenged by parliament in 1873 by
using "owners" in the title of the Return of Owners of Land.
Finally, and even more urgently, we need to simplify both land law and
the appalling and wholly unnecessary language in which it is dressed up
by fee-farming lawyers.
If these three things can be achieved, it will lead to a simplification
of documentation and a lowering of lawyers' fees for land
transactions.Yet those three steps, useful though they might be, will not
take us to the heart of the matter, which is the urban acreage of the UK
and the houses we live in, which stand on it.
To become environmentally efficient and more habitable, and with ever
larger numbers of people working from home, houses need to be larger and,
wherever possible, to have a garden. To achieve this transformation, we
need to know the facts about land and its use, not the fiction spun by
those trying to sell plentiful acres as if they were a scarce
Next week, in the second part of his investigation into land ownership,
carried out exclusively for the New Statesman, Kevin Cahill asks:
"Who owns the world?"