Land is an essential factor in all economic activity but, if it is not properly managed and regulated, it can play a destabilising role in the housing market and the wider economy. 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.
This conclusion is based on five key propositions:
• The broken land market has a key role in driving wealth inequality in the UK.
• The broken land market is the driving force behind our broken housing market.
• The broken land market has played a key role in the financialisation of the UK economy and is a cause of the UK’s poor productivity.
• The broken land market and high house prices are feeding macroeconomic instability
• The UK’s systems for regulating and taxing land do not seek to target or fail to adequately capture the ‘economic rents’ that arise from land.