UK land wealth increases by £450bn

New research has revealed that Britain’s net worth has now reached more than £10tr, with a humungous 51% of that wealth being tied to land values.

UK land wealth increases by £450bn

The Office for National Statistics (ONS) revealed that due to dramatic increases in the value of land and property that the UK now has over £5tr worth of land wealth, meaning a higher proportion of the national wealth than any other G7 economy that produces similar statistics.

It’s not a surprising statistic when taking into consideration the quickly growing demand for land and investment property, meaning that developers and investors are keener than ever to get their hands on land that can be turned into premium real estate. For instance, land prices in city centres like Manchester, Leeds and Liverpool are rising quickly and, often, new build apartments and houses are increasing in value by up to 30% as soon as they’re completed.

The total increase in land value across the UK was a huge £450bn, higher than any previous year that had been analysed. The increase continues a trajectory happening since 2012 that has pushed the average assets held by British citizens to £155,000, up £6,000 from 2016.

As a comparison, France, which has twice the land mass of the UK, has 41% of its total net wealth tied up in land value, whilst for Germany that figure is 26%.

It appears that there is a growing focus for large developers outside of central London, with the Duke of Westminster’s Grosvenor Group saying it was taking a growing interest in residential property outside the city centre.

Certainly, residential developments in the North West have been the focus of wealthy investors looking for higher returns for some time now, with the latest Deloitte crane survey showing that Manchester is one of the most active cities in Europe for residential construction.

It’s not just rising demand that can explain such a monumental increase in value, however, with the ONS stating that a rising British population can also be seen as reason for such dramatic rises. According to the Guardian the steady increase in land values is expected to trigger further calls for a land value tax or new rules allowing local authorities to reap the rise in values by allowing them to buy land earmarked for development.

Whatever the government may decide to do there is no hiding from the fact that in this economic climate there’s no reason to believe that demand for property, land and other land value associated investments will reduce any time soon.

The government is currently doing a world tour to encourage investment post-Brexit and, with much of the wealth being created by foreign investors piling into British property and new builds, it’s unlikely that Theresa May’s government would risk implementing any type of policy that could create a barrier.

With cities in the North currently booming with construction activity, don’t be surprised to see the next set of figures show an even bigger increase in value.

Looking for your next investment? Have a look at our portfolio of outstanding buy to let property investment opportunities in the North of England

UK BTL vertical - April 2019

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