Why do we have a housing crisis in the UK? Why is it that a wealthy country, increasing in wealth each year, cannot provide enough housing for its citizens? I am sure you know of the latest figures which show that fewer and fewer young families can buy a home, and that more and more are forced into rented housing with very little security. In 1990 about two thirds of people aged 35 purchased their own homes, now it is just over one quarter. Fewer and fewer young people can afford to even save up for a deposit, let alone get a mortgage. In the 1970s a home cost about three times one person’s income, and that was about the amount the old building societies would lend. Now a home is about ten times the annual income of one person.
The standard answer offered by the politicians is that we need to build more houses, because there are not enough. It is simply market forces at work, they claim. If there is a shortage, then prices rise. But this is a false explanation. What is happening is that more and more people are forced to rent their housing because they cannot buy a home, and rents are also rising and being exploited, so they are not a cheaper alternative to buying. Over the last three decades the proportion of net income spent on rent has risen from 20% to 45%, and in London even more. Now this is not due to a shortage of houses, but to an increase in land speculation and turning houses that were once privately owned into rented homes. So instead of houses being regarded as homes for our citizens to live in, they have become investments for speculators. And these speculators have gradually gained a monopoly on housing, while at the same time ordinary people no longer see a home as a place to live, but as an investment for profit. They too have become speculators. The government ‘Help to Buy’ scheme has increased house prices and made the situation worse, without building even one new home.
One further factor is that most of the social housing built in the 50s and 60s which provided rented homes at modest prices for nearly half the population were sold off and many have since been bought up by speculators and are now at the high end of the rented market. This meant that an alternative low rent option was removed by government policy and everyone was forced onto the commercial market, which in turn now acted as a monopoly. Obviously the large cheaper rented housing sector once acted as a lever to hold down the prices of the private sector. At the same time, when the building societies loaned only up to three times the annual income of one earner, there was a natural limit on the general cost of housing. It remained at about 25% of net income. But with the regulation on banks removed in the 1980s they entered the mortgage market and soon were lending at higher times the annual income of the borrower. This in turn encouraged the buy-to-let market, which often got lower rates of interest than home owners. This also meant that bank lending for production decreased while lending for housing speculation increased. Then it all toppled down in 2008 with the crash of the banks. This was the inevitable and predicted result of the ideology of deregulation and land speculation. It is economics without ethics, a purely parasitic economy which created no actual wealth.
I am sure most of us here know all this, but it is helpful to get these facts and figures clear before we start examining the deeper causes of the housing crisis. Given these facts and figures the standard response of the politician is to say, this is just the free market working in its natural way and eventually it will adjust and the housing problem will go away. When they say this, they actually have no idea how the market works and are speaking an empty doctrine. There is nowhere on earth a place where speculation on housing has adjusted and brought down the cost of housing. There is now the same housing crisis in New York as here in London. So a major challenge we must now confront is that the standard economic theories of market adjustment misdescribe how the market works. This is something the Nobel Prize winning economist Joseph Stiglitz has often pointed out. And things are even worse when both the right and the left believe in this false doctrine, the right arguing that the market will adjust by itself, and the left arguing for state intervention. How can either side provide a remedy if they have a false theory of the market and of basic economic laws?
One of the main reasons modern economic analysis goes astray is because it tries to observe the economy in a purely mechanistic way. It seeks to reduce the market to mathematical models. This means that any aspect that is not so reducible is eliminated from any account. According to this modelling it makes no difference if a product for the market is apples or organs for transplant. Such modelling is a kind of pseudo-science, an attempt to reduce human community to material mechanisms. The consequence of this approach is to open an unbridgeable gap between so-called ‘market forces’ and natural justice. The greater part of modern legislation is drafted in order to mitigate the unjust consequences of this gap. Even so, such legislation is resisted by blind adherence to a false notion of the free market. Take the resistance of the tobacco industry to restrictions on smoking in public spaces for example. According to the mathematical modelling, the tobacco industry makes a substantial contribution to the economy and produces jobs. The mathematical model does not take into account the human consequences of market activity. So governments have to try and pick up the pieces and mitigate the human consequences of indifferent market forces.
Why should market forces be in conflict with natural justice? Is a society naturally in conflict with itself? No other species acts against itself in this way. So why is it that the human species is the only species that creates an environment hostile to its own existence? Why must it endlessly need to mend the harm it inflicts upon itself? There have been theorists who hold that this must be so, such as Thomas Hobbes in the seventeenth century and Herbert Spencer in the nineteenth, who attempted to reduce human nature to biological urges of self-interest and competition. But if society is, as they maintained, a state of conflicts of self-interest, why hide this truth behind the idea of ‘market forces’. Why not simply say ‘market conflicts’ if that is what is really meant by the ‘free market’? That would explain why market forces act against natural justice.
There are those who accept this crude notion of society, but this does not explain why there is in every human being a sense of natural justice that knows it is wrong. It is this sense of natural justice that seeks to mitigate the consequences of the so-called ‘free market’. The sense of natural justice accepts that we are collectively responsible for the wellbeing of society. Even the criminal fears natural justice!
But at this time we are also having to respond to the harm our market activity is doing to the environment and to the ecosystem at large. If our modern economy is harming the earth itself, this is showing us something neither the mathematical models nor the Hobbesian or Spencerian biological or mechanistic analysis account for. It shows that the very conception of the market society is contrary to nature, contrary to the biosphere in which we live. That is to say, it is unlawful, against the laws of nature, and that the laws of nature as conceived in the Age of Reason and the Enlightenment are misconceptions. This is important, because the founders of classical economics built upon these misconceptions of nature. And, indeed, this conflict between the market and natural justice is present in their writings – in Adam Smith and John Locke for example, and later in the contradictions between the early and later writings of Herbert Spencer.
This conflict in their works lies precisely where it now lies – a conflict between the market ideology and our relation to the earth. It was overlooked that the earth is our dwelling place. It is not a market resource, and describing it as such introduces the first and greatest distortion in economic theory. The early economists recognised that the three basic components of an economy are land, capital, and labour. In this they were correct. Land is the place where capital and labour are applied. But first of all land is the human habitat, our natural home. It is also the source of all material used by labour in production. But this habitat and this source is already given by nature. Nobody makes it. Nature provides our dwelling and our sustenance. And this is what is meant in economics by ‘land’. Land is just the same for the Bushman of the Kalahari Desert as for the dweller in the great city of London.
Capital and labour are the human contribution to the creation of wealth. Nature gives the land, while previously produced wealth provides the capital, and labour applies the skill and effort. Capital is not money. It is the tools and resources used in making things, such as the carpenters hammer and his wood.
The early economists recognised this simple threefold division. But then they got into a great muddle over how the earth, the land, our habitat, becomes someone’s private property. If it is given by nature, how can any individual claim ownership of it? That was the question the American Indians put to the European invaders. And even more to the point, how can any individual claiming such ownership demand a fee from anyone who needs access to it? The early economists could not get round this problem. They admit there cannot be any natural right of land ownership, but say that, since the appropriation happened generations ago it is too late to remedy it. In other words, time turns an injustice into a justice, or at least into an injustice we must live with. So land ownership is justified by whoever takes it first and we must live with the consequences forever.
Now if this applies to land, why not also to labour? Can that also become private property? That question was also too awkward to answer, and slave ownership held out for a long time before it was abolished. The slave-owners made the same arguments as were made as for the appropriation of land. In modern economic theory the land, given by nature, is no longer distinguished as an economic element but counted as part of capital. And in this way the difficulty of the early economists is made to conveniently disappear. Through a misclassification land becomes someone’s capital. As a distinct contribution of nature it is no longer an economic factor. This earth, now called capital, is the environment we are destroying. Consider: Does not an owner have the right to destroy his own property if he wishes? And is there not a curious contradiction in the ecologists calling this the ecosystem or the biosphere, and the economist calling it capital? For one it is the whole of nature, for the other it is private property. This is a contradiction that no amount of economic sophism can get round. We are living in an age in which we assume we are not the inhabitants of nature along with all the other creatures.
If we can see that the premises of modern economic theory are false or defective, and if we see further that belief in these false premises has harmful consequences, then are we not called upon to reason through these consequences and see if they indicate a remedy? But before we can begin to seek remedies to these consequences we need to clearly understand how they arise. We must resist the temptation to jump to remedies without fully understanding the problem. This is what our current politicians tend to do, either arguing that market forces are self-adjusting, or that the state must take over everything. This kind of leaping to solutions without understanding the problem is thoughtless and irresponsible. But also notice carefully that both these thoughtless solutions maintain the same basic falsehood – that the earth or land may be property. The only debate between them is whether private individuals, companies, or the state should be the proprietor.
So, let us be cautious and reason through the consequences of the ownership of land. And here the most obvious example is the present housing crisis. Nothing illustrates more clearly that we are living in an economy in which we are inflicting harm upon ourselves. As citizens of the United Kingdom we are collectively denying ourselves a basic right of citizenship – the right to homes in our own democracy. Why are houses so expensive? Why does the same house become more and more expensive over time? And why do governments say the rise is house prices indicates the economy is growing when in fact it is causing poverty and homelessness?
This is not so hard to work out. A house in London compared to a similar house in Blackpool will be ten or twelve times more expensive. Why is that? The reason is obvious. The difference in price is the difference in land value, not the house itself. An empty site in London could be worth twenty or thirty times more than a mansion in Blackpool. So it is not really house prices that keep rising, but rather the land they stand on. Now, how did the owner of the land give it that value? How do house owners in London give their properties more value than house owners in Blackpool? We know perfectly well that it is not owner who gives it that value. He might get the value, but he did not create it. It is in fact the surrounding community and its public facilities that creates the value of the land the house stands on. It is the amenities of a great city like London, with its infrastructure, arts and culture and history, that create the land value, and Blackpool simply does not have all these things. In other words, it is the surrounding community that creates the value, not the owner of the property. And when the owner sells the house, he receives the value that the community created for that property. And the buyer, seeking that value created by the community in London, is prepared to pay the seller his high price. And in that transaction no contribution has been made to the economy by the buyer or seller. The current housing market is simply pyramid buying and selling.
This is even more obvious for rented homes. The landlord in London receives in rent the value that the community of London creates. He is not providing this value, he is charging for access to it. And it is because he can charge for access that he makes the investment in rented housing in the first place. One might say that the largest proportion of rent is a toll or levy for access. But that toll or levy does not go to the provider of the benefits, which is the community at large, but is appropriated as private income by the landlord or property speculator. To put that in other words, the British tenant must pay a private individual for his right to settle in Britain. The landlord, in his turn, can charge the highest price he can possibly get. And at this time this is an increasing proportion of the tenant’s wages. This in turn reduces the tenant’s spending power, which in turn harms the general economy. Further, the landlord may neglect the house he is letting, demonstrating that the rent is not for the home itself but for the land it stands on.
Compare this to renting anything else. If I rent a car, for example, I receive the benefit the agent provides. I do not pay him for access to the roads, which the community provides, just the use of the car. And his cars do not increase in value with time through ‘market forces’, but rather they decrease in value. His is a legitimate return on his investment as he is charging only for what he actually provides. If he were to charge more, then a competitor would enter the market charging less. If there is anything favourable in the modern competitive market economy that does involve ‘market forces’, then it tends to press prices downwards. So we must ask, why does this not happen in the same way with housing? The answer is simple. In housing one is paying someone for something the seller does not provide, but which is provided by nature and the community at large. And nobody can produce more land, so private ownership of any land is monopoly.
The difference between the rented car and the rented house is that the rent on the house is a charge for the use of the land. As the house grows older it deteriorates and requires upkeep, while the land stays the same but gathers value from the surrounding community. In London, for example, property at the new Crossrail stations has risen 40% in value, so the landlord increases the rent and appropriates the added value. The tenant, in effect, is paying the landlord for access to the new station, even though it was not him that provided it. Indeed, it was the tenant’s taxes on his wages that paid for it.
I hope it is now clear that ‘land’ plays a distinct part in the economy and cannot be classed as capital. The land is what nature gives, just like the air or the sunshine. It cannot be made into private property and citizens compelled to pay the owner for the right to dwell there. This is where there is a deep conflict between current economic theory and natural justice. If a foreign nation charged a levy on every British subject for dwelling here, we would protest – just as King Arthur did against the Roman Tribute in the Arthurian legends. Yet we accept the right of our own citizens to do it to us, who might as well be foreign invaders. Indeed, in London the prime sites are now largely owned by overseas landlords, which our politicians call ‘city investors’. How can we be a sovereign nation if the very land we live on is owned by foreign investors?
This, however, is the consequence of the false economic doctrine that land can be private property. What nature provides freely for all creatures cannot be appropriated by a private individual who then charges for access to it. As I said earlier, the classical economists, such as Adam Smith or John Locke, as well as the French Physiocrats, realised that land cannot be privately appropriated, and that if it was, it would cause huge distortions in the economy, rendering great wealth to one section of society and driving the other into poverty. They realised this. And we now see it very clearly, not only here in the UK but around the world, for example in New York, as I mentioned earlier, where the cheapest home in the desirable areas is more than 10 million dollars. The poorer people are being driven out by rising rents, just as is happening here in London, and soon we shall have a crisis of service providers who can no longer live in the city they serve. I mean doctors and nurses, firemen, policemen and so on. They are being driven out because their wages cannot cover New York or London rents or house prices. And yet they are the people who sustain the infrastructure of the city.
Now it is one thing to see the scale of the problem and its consequences, but another to see a just remedy. Building more social housing, if done on a large scale, would indeed help enormously, as it did in the 50s and 60s until the Thatcher government gave the tenants the right to buy, and who eventually became speculators. There are other schemes, such as cooperative ownership, shared ownership, and these ideas are helpful and would certainly mitigate the problem. Also the reintroduction of fair ‘rent control’, which was abolished in the Housing Act 1980, would make a big difference. Ethical companies, such as Cadbury or Clarks shoes, once built fine homes for their employees. Clarks also built schools for their employee’s children, libraries, and swimming pools. These companies were inspired by Quaker principles and they showed that natural justice and economics worked perfectly together to the advantage of all.
But these examples do not address the root of the problem. And this puts us in a similar position to the classical economists like Adam Smith who saw the remedy but lost their nerve in properly advocating it. They saw that ‘rent’ actually belonged to the community whose presence created it. That is to say, rent was the natural revenue for common or government expenditure – which is to say that a ‘natural tax’ arises spontaneously in any society to provide for its common services. This means that tax put on wages or on the production of wealth is harmful to the economy, and especially so when the natural revenue is privately appropriated as unearned income through land speculation.
But for some reason this simple truth remains very hard to grasp. It is no accident that modern economic theory classifies land with capital, or as Thomas Piketty does, simply includes it in the definition of ‘wealth’. That is even worse because ‘wealth’ is what labour produces, and so it cannot include land. There is a great fog that somehow makes the most fundamental economic laws elusive and hard to grasp. One of the reasons for this is that, in our modern age the ‘market’ has become our culture. We have come to conceive society primarily in terms of acquiring wealth. It makes no difference if we are left wing or right wing. This raises a philosophical question rather far above the heads of economists, of how it happened since the seventeenth century that the human ‘self’ became conceived as ‘proprietorial’, and that the relationship of the human person to things became that of ownership. Life is all about acquisition. That is where Adam Smith broke faith with his perception of how the economy works. He defined the aim of life as the ‘pursuit of luxury’. In his times, and ever since, that has been taken as the true aim of human life. This meant he could not follow through on the question of land ownership. Indeed, he argued that the basis of all property is ‘self-ownership’, and that the application of labour to land extends self-ownership into land ownership. It is on this basis that he says that, since such ownership has already occurred, it cannot be undone. Buying land, on this basis, further legitimizes it through legal contract.
Although Smith’s argument is fallacious, on a deeper level it persuades because it confirms and extends the prevailing notion of self-ownership and self-identity. The idea that the human person owns themselves, which began to take root in the sixteenth century, has entirely eradicated the ancient conception of humanity as part of nature. This is something the north American Indians understood, or the Kalahari Bushmen or Australian Aborigine’s. They saw that land belongs to no one. It is the free gift to all, and indeed it is sacred. And this is still the Christian view of nature, affirmed in the recent Encyclical of Pope Francis, On Care for our Common Home.
In recent times the proprietorial notion of selfhood has extended to include companies and international corporations. They have taken on the legal status of a ‘person’ and all the rights of a person. This in turn has effected patent law, where now an international company can patent a newly discovered plant or its genetic code. This has enormous consequences in farming and medicine, to state the most obvious. It gives the patent holder a monopoly over crops and pharmaceuticals. And this transcends all national boundaries. In the light of such ownership the sovereignty of a nation is meaningless. Yet the private ownership of a plant species or its genetic code, or a modification of that code, is no different than the private ownership of land. It is ownership of nature.
There is not time to follow through on all the implications of this proprietorial notion of self and our relation to the earth or nature. The most important thing to appreciate is that it is the hidden assumption behind the notion of free market forces. There are no ‘forces’ in the market apart from human desires and actions. The argument that market forces will balance out any harmful consequences is really nothing else than to grant full reign to the ruthless acquisition of property. That is what it is in practice. And because the hidden assumption behind it remains unseen, it may be argued that any intervention in the ‘self-regulation’ of the market will result in loss of investment and loss of jobs. Strictly speaking, that would mean that regulation of food standards, or of medicines, or animal welfare and so on is unnecessary. As we said earlier, the greater part of modern government legislation is there to mitigate the harmful consequences of ‘market forces’. Our Welfare State came into being for that reason, and likewise the abolition of slavery and child labour. Justice and the common good tugs against the free reign of acquisition and monopoly. The very idea of the proprietorial self is in conflict with natural justice and the common good.
If, as I suggested earlier, the greater portion of rent is the natural revenue for governmental functions, then it is clear that there is no need for the state to take over ownership of the land, which is merely changing one proprietor for another. So we may rule out any form of communism. On the other hand, there is no need to rule out ownership of land as such. All that is required is to collect the rentable value of that land as government revenue. This would return to the community the common value created by it. At a stroke it would remove all land speculation. And, as I hope I have shown, it is land speculation that is the cause of the housing crisis in the UK.
A major difficulty in this, which I am sure you have already noticed, is that it would cause house prices to fall. The seller would no longer be able to claim the future rentable value of the land as he does now in his selling price. For the mortgage holder this is going to appear as a great loss. This is a standard critique of the introduction of a land tax. But it relies on false reasoning. If the price of all houses falls, then the vendor will pay less for the new house he purchases. And instead of paying a mortgage at interest, he will pay a land tax into the community. Also, the implementation of a land tax would remove the need for all other taxes on wages or on industry. This in turn would remove the need for complex tax administration and reduce the cost of government administration. On present estimates the amount collected through a land tax would be roughly equivalent to what is presently collected through taxes on wages and industry. The only real and profound change would be that unearned income from land speculation would cease, which means that something like 30% to 45% of wealth would no longer be siphoned off from the economy as unearned income.
If the price of food or cars or computers fell, everyone would rejoice. But if the price of a home fell, there would be an outcry. This shows how land is not a commodity like any other, but a claim upon what cannot legitimately be claimed.
This is the most elegant and just solution to the present housing crisis. It is not a new idea but was discovered by the early economists, and is now being revived by leading modern economists such as Joseph Stiglitz and Fred Harrison, and also fine journalists such as Anna Minton in her recent book, Big Capital: Who is London For? There she exposes the devastating effects of land speculation on the poor, and how the land market is being used for money laundering by international criminals. You may have seen her on the Channel 4 News when she was one of the people interviewed after the Grenfell Tower fire, where the surviving tenants remain homeless amid huge luxury home developments. She argued for several solutions to the housing crisis, such as building more social housing and also introducing a land tax to put a stop to land speculation. But I am afraid the politicians who believe in the unfettered free market cannot hear this truth. And really, this is the problem. Out of blind faith they cannot listen, and this is because their faith is in an ideology rather than in understanding the actual laws of economics, or any care for natural justice. Money has become more important than people or the citizens of our nation.
We are left with a stark choice. Seeing growing homelessness all around us, and people being forcibly removed from London to other cities, are we not obliged to choose between private gain and natural justice, between speculation and the common good? Must there be a necessary conflict between a flourishing economy and the common good?
If there is such a conflict, surely it is worth enquiring into and seeking a harmony between them. According to the ancient philosophers, from Greece, or India, or China, it is a natural human concern to seek justice, and there is a law in the very fabric of human society that determines how well it will flourish according to how well it seeks justice. We find it in Thomas Aquinas, who says that if someone is destitute, then the laws of property are suspended and that person is entitled to take from those who have what he needs to sustain himself. In other words, the legal realm is always a working compromise before natural justice or divine providence. The highest law is pure goodness. That ultimately is the measure of society. Here we are, in Friends House, where the Quakers believe in the divine essence of every person. Imagine if economic theory and ethics were based on that noble idea? Could we then have a nation built on mutual exploitation and pretend this happened through some ‘invisible hand’, or the mechanical ‘ropes and pulleys’ of Hobbes’ conception of society, ordering all things and making poverty and homelessness legitimate?
It is said that economics is the dismal science. But this is only because it has been divorced from the human realm and the dignity of the human spirit. Any economic theory that does not join the creation of wealth with justice will represent a false analysis of society. Any conception of a nation which abandons the poor to homelessness is a false analysis of nationhood. A nation, a society, is only a nation or a society when it includes all its people into citizenship. To be exploited by a housing market that exists only for money-making is to be made into non-citizens – both for the exploiter and the exploited. A citizen, by definition, is one who contributes to the common good.
My whole argument is that the private ownership of the land, of our common habit, distorts the natural laws of the economy, and it is this distortion of the natural order that brings about the destructive divide between rich and poor. If there is to be a truly free market, then it must conform to the laws of nature and remove any legalised distortions which deprive anyone from equal right to the earth. It is the same distortion of our natural relationship to the land that lies at the root of the present destruction to the environment. Society is not outside nature and nature cannot be commodified without dire consequences to all livings things.
Whether or not I have convinced you that the land, our Mother Earth, can be private property or not, I hope that I have at least found agreement with you that the present housing crisis in the UK, and spreading world-wide, is the most fundamental economic and social problem facing us at this time, and that it is a manifest injustice. As Tolstoy said long ago, if our relationship with the land is wrong, then all else is wrong too. Nothing makes this clearer than housing. How can you be a citizen with nowhere to live, or if compelled to give more than half your income to a land speculator? If that is so, then you do have to ask with Anna Minton, Who is London For? Is the city for the people who live there, or for speculators who siphon off its wealth?
As I am speaking on behalf of the Henry George Foundation, let me close with a quotation from him which he wrote over a hundred years ago in 1884:
Our fundamental mistake is in treating land as private property. On this false basis modern civilization everywhere rests, and hence, as material progress goes on, is everywhere developing such monstrous inequalities in condition as must ultimately destroy it. As without land man cannot exist; as his very physical substance, and all that he can acquire or make, must be drawn from the land, the ownership of the land of a country is necessarily the ownership of the people of that country — involving their industrial, social and political subjection. (Social Problems, Chapter 18)
- Q. How would my home be secure if the Land Tax was introduced?
- A. The reply I gave to this question was a bit misleading. I said that one would bid for the land. This would only be the case for unused land, or for businesses as in Hong Kong, for example, where the government owns the land. But in the UK a home owner would simply be charged a land tax in the same way as they currently pay Council Tax. They would remain the freehold owner of the land. I are not proposing state ownership of the land.
Q. If the government collected the land tax, how would corruption be prevented?
A. In a democracy it is up to the voting citizens to assure government acts for the common good and is not open to corruption. This would be the same if the land tax was introduced. However, since the relation between this form of taxation and government would be direct and clear for all to see, and no privileges or advantages could be obtained through loopholes or tax evasion schemes, citizens could hold government more accountable and play a fuller role in government. Also, since tax would be based on land value, the revenues collected by government would be fixed by land values, and therefore limited. All government income and expenditure could be clearly accounted for. It would be for the community to decide what common uses it should be put. It would not be used to redistribute wealth.
- Q. What practical things can we do to bring about the introduction of the land tax?
- A. A change on this scale would be possible only if the nation wanted it. It is no use trying to introduce such a change against the consensus of the people, and least of all where there is huge vested interests in keeping the present unjust tax system. What is needed is for citizens to understand the justice of a land tax, and the injustice that follows from land speculation. A nation flourishes according to the degree to which it understands and values justice. This would seem to be a natural social law. We find it in Plato and the Greek philosophers and also in the ancient Chinese and Indian philosophers. So all we can do is seek to educate ourselves and others. But also, it is the responsibility of every citizen in a democracy to understand justice and seek to establish it throughout society. In a democracy it is no use blaming governments for things that are wrong. Being a citizen is being responsible for the common good. If we do not do that, then we are not really citizens.
- Q. How would the land tax effect a block of flats?
- A. Again my reply was not that clear as I suggested that all homes should be beautiful. What I meant by this was that the ugly tower blocks we now see in the city, whether for social housing or luxury apartments, are all the product of land prices and land speculation. It means many homes get crammed into small spaces. Modern UK homes are now the smallest in Europe, a direct effect of land speculation and the lack of responsible government building regulation. But land tax would fall on the freehold owner of the block of flats just like any other land use. But a land tax would bring marginal sites into use, and so homes would naturally spread out and not be artificially distorted by land speculation. The price of a house would be governed by the actual costs of building and not by the land value. Presently the land value is about 80% of the purchase price of a home. It takes some vision to see how housing would change for the better with the introduction of the tax on land and removal of all other Cramped and ugly homes, built for land speculation, would cease to be built and would no longer be desirable.