A dramatic rise in land values pushed Britain’s wealth to a fresh high of more than £10tn last year, highlighting the huge gains made by developers in property hotspots across the UK. The ONS figures go beyond a study last year by Lloyds bank that showed that Britain’s net worth had climbed above £10tn for the first time but did not single out the value of land.
From London and the home counties to Cambridge and popular parts of Devon and Cornwall, land values have become the single largest element of wealth, dwarfing household wealth locked up in property and financial savings.
Official figures showed that the UK’s net worth rose by £492bn between 2016 and 2017 to £10.2tn, with the lion’s share of the increase accounted for by a £450bn jump in the value of land.
The Office for National Statistics said consistent increases in the value of land meant it accounted for 51% of the UK’s net worth in 2016, higher than any other G7 country that produces similar statistics. In France, which has a land mass twice the size of the UK, land values account for 41% of wealth while in Germany they account for only 26%.
The Duke of Westminster’s Grosvenor Group said it was taking a growing interest in residential property outside central London. It said it would build thousands of homes on greenfield sites around Oxford and Cambridge, which are to benefit from Treasury plans to connect the two university towns with a cross-country rail link.
The price of farmland can increase by 100 times when developers succeed in persuading ministers to redesignate it for housing. Areas of London that were previously derelict, especially in the east of the capital, have seen huge rises in values as regeneration efforts and improved transport links have fed into property prices. Commercial property has also enjoyed an upswing in value since Britain’s recovery following the 2008 banking crash, more than offsetting recent declines in much of the retail sector.