I was chatting to somebody who is quite sympathetic to the idea, and he said that he assumed somebody who owns an acre of central London would pay more than somebody who owns an acre of Scottish farmland.
Yes of course, I replied, the London landowner would pay a hundred thousand times as much. He said that sounds a bit extreme - he would only expect the London land to be worth twenty or thirty times as much as the farmland.
So I did a couple of calculations for him (all figures for annual rental value).
Scottish farmland, £50 to £100/acre (not worth taxing, if truth be told).
Average UK home £12,000 x 2/3 location value x ten homes per acre = £80,000/acre
Office space in UK city centres excl. London = £50/sq foot plus £20 Business Rates x 9 (for sq yards) x 4,840 (for acres) x 5 storeys = £15 million. Knock off 10% for running costs and 50% for the land used for car parks, light wells, access, pavement etc = £6 million/acre.
Shop space in most expensive shops on Bond Street, London is £1,000 per square foot with £100 for four storeys of offices above, do the same calculation as before (Business Rates are lower as a percentage), you end up with £30 million/acre.
So taking farmland £100 as 1, the relative values are
Housing 800
City center office space 60,000
Bond Street, London 300,000
The most expensive land of all is AFAIAA the Coca Cola sign in Piccadilly Circus, the rental value is over £20 million a year ÷ by area of land used virtually nil = value per acre more or less infinity.
The sign alone is worth 200,000 acres of farmland (a farm the size of Midlothian), let alone the shops and offices below it.
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