Gwerth Tir Cymru | The Value of Land in Wales

Blog gan Rhys ap Gwilym, Uwch Ddarlithydd mewn Economeg yn Ysgol Fusnes Prifysgol Bangor

Scroll down for the translation of this blog post by Dr Rhys ap Gwilym, Senior Lecturer in Economics at Bangor University’s Business School.

Ar ddechrau blwyddyn pan clywsom bod Elon Musk wedi cymryd lle Jeff Bezos fel person cyfoethocaf y byd, cawn maddau i’n hunain am gredu bod natur cyfoeth yn yr 21ain ganrif wedi trawsnewid, tu hwnt i’n cydnabyddiaeth. Ond mae cyfoeth y biliynwyr ‘tec’, a adeiladwyd ar sylfeini arloesedd ac eiddo deallusol, yn eithriad. Mae’r mwyafrif llethol o gyfoeth mewn economïau modern, datblygedig wedi ymglymu mewn eiddo materol a, gan amlaf, ym mherchnogaeth tir. Fel yma mae wedi bod erioed. Yn ôl  Amcangyfrifon Mantolen y DG y Swyddfa Ystadegau Gwladol, mae tir yn cynrychioli 57% o werth net cyfanredol y DG (gweler tabl 1).

Mae perchnogaeth tir yn parhau i fod yn gonglfaen i rym economaidd a gwleidyddol, ond eto mae ein dealltwriaeth o bwy sy’n berchen ar dir Cymru, a’r hyn y mae’r tir hwnnw’n ei werth, yn dal i fod yn anghyflawn.  Os ydym am gael dadleuon gwybodus am anghydraddoldebau economaidd, am effaith   tai haf neu boneddigaeddio (“gentrification”) yn ein dinasoedd, yna mae angen cael gafael ar y wybodaeth sylfaenol hon.

Tabl 1: Mantolen y DG, diwedd 2019, £ triliwn
Anheddau1.9
Adeiladau Eraill1.8
Peiriannau a Chyfarpar0.6
Eiddo Deallusol (I.P.)0.3
Stoc0.3
Tir5.7
Asedau/Rhwymedigaethau Ariannol-0.6
CYFANSWM10.0
Ffynhonnell: SYG

Felly faint o’r £5.7 triliwn hwnnw o werth tir yn y DG sy’n cysylltiedig a Chymru? Fy amcangyfrif gorau yw bod gan dir Cymru gwerth ariannol o tua £152 biliwn, neu 2.7% o gyfanswm y DG. Mae hwn yn cymharu gyda’n cyfran o 4.6% o’r  boblogaeth, a chyfran o 3.5% o GDP y DG.

Mae Tabl 2 yn cyflwyno dadansoddiad o’r cyfanswm o £152 biliwn yn ôl y math o dir. Y peth cyntaf i’w nodi yw sut y mae’r mwyafrif llethol o werth tir, 75% ohono, yn ymwneud ag eiddo preswyl, er bod yr eiddo hyn ddim ond yn cynrychioli 2.6% o’r holl dir (gweler tabl 3 isod). Mae eiddo masnachol yn cyfrif at 18% pellach o werth tir er gwaethaf cyfrif am ffracsiwn o 1% o arwynebedd y wlad. Mae tir amaethyddol (wedi’i ddiffinio’n eang i gynnwys porfeydd garw) a choetiroedd yn cynrychioli dros 90% o arwynebedd Cymru, ond dim ond ychydig dros 7% o werth y tir.

Tabl 2: Amcangyfrif o werth tir Cymru                  (£miliwn) 
Tir sy’n sail i eiddo preswyl113,43174.6%
Tir sy’n sail i eiddo masnachol (sy’n talu Ardrethi Annomestig)   27,60218.2%
Tir amaethyddol8,1575.4%
Coetir2,8501.9%
CYFANSWM152,040100.0%
Ffynonellau: Preswyl a masnachol: ap Gwilym et al (2020) Amaethyddol: Llywodraeth Cymru (2019) a chyfrifiadau’r awdur Coetir: John Clegg (2019)  a chyfrifiadau’r awdur

Amcangyfrifwyd gwerth  tir amaethyddol a choetiroedd ar y lefel gyfanredol ac mae angen gwneud rhagor o waith i fodelu’r gwerthoedd hyn wedi’i dadgyfuno fel y gallwn gael darlun eglurach o sut mae gwerthoedd tir yn y sectorau hyn yn amrywio ledled y wlad.

Mae’r gwerthoedd tir ar gyfer eiddo preswyl a masnachol, ar y llaw arall, yn seiliedig ar fodelu manwl a  wnaed gan fy nghydweithwyr a minnau ym Mhrifysgol Bangor, fel rhan o asesiad o ddichonoldeb  Treth Gwerth Tir.[1] Mae ein gwaith modelu yn amcangyfrif bod cyfanswm gwerth tir preswyl yng Nghymru yn £113.4 biliwn, sy’n cynrychioli 48% o gyfanswm gwerthoedd eiddo preswyl (yr adeiladau sydd wedi’u lleoli ar y tir sydd yn cynrychioli’r 52% arall).

Tabl 3: Defnydd Tir yng Nghymru                  (hectarau) 
Amaeth1,073,09050.6%
Coetir   321,72115.2%
Glaswelltir garw a rhedyn   305,78014.4%
Tir naturiol a rhannol naturiol   220,37210.4%
Adeiladau preswyl     9,7900.5%
Gerddi preswyl 43,9062.1%
Trafnidiaeth ac isadeiledd60,1482.8%
Diwydiant, swyddfeydd, siopau ayyb     4,1230.2%
Adeiladau cymunedol     6,1860.3%
Hamdden awyr agored    18,1220.9%
Anhysbus / arall33,8961.6%
Dŵr    24,2721.1%
CYFANSWM2,121,406100.0%
Ffynonellau: Arolwg Ordnans a chyfrifiadau’r awdur

Fodd bynnag, mae’r cyfartaledd moel hwn yn cuddio’r amrywiad enfawr mewn gwerthoedd tir preswyl ledled Cymru. Mae Ffigur 1 yn dangos y gwahaniaethau hyn, gyda arlliwiau tywyllach o wyrdd yn cynrychioli gwerthoedd tir uwch fesul metr sgwâr o eiddo preswyl mewn cymdogaeth, ac arlliw goleuach yn cynrychioli gwerthoedd tir is. Amcangyfrifwn mai gwerth cyfartalog tir preswyl yn y gymdogaeth drutaf yng Nghymru – Dinbych y Pysgod, De 1 – yw £2,589 fesul metr sgwâr. Ar yr eithaf arall, mae gan 0.9% o holl gymdogaethau’r wlad werthoedd tir negyddol. Hynny yw, byddai pris tŷ a adeiladwyd ar ddarn cyfartalog o dir yn un o’r lleoliadau hyn yn llai na chost adeiladu’r tŷ.

Pan wnaethom y gwaith hwn, y syndod mwyaf i mi oedd i ba raddau yr oedd ein model yn cyd-fynd â fy rhagdybion. Mae’r gwerthoedd tir uchaf wedi’u canolbwyntio yng Nghaerdydd, Bro Morgannwg ac mewn mannau gyda niferoedd uchel o dai haf megis Dinbych-y-pysgod, Abersoch a Threfdraeth. Mae’r tir rhataf i’w weld bron yn gyfan gwbl yng nghymunedau ôl-ddiwydiannol maes glo de Cymru.

Yr hyn sy’n drawiadol yn ein canlyniadau yw pa mor lleol yw rhai marchnadoedd tir preswyl. Yn achos Trefdraeth, y cyfartaledd gwerth tir fesul metr sgwâr o eiddo preswyl yw £2,201, o’i gymharu â dim ond £855 yn Dinas gyfagos. Mae hynny’n cyfateb i bremiwm o £140,000 ar eiddo preswyl arferol o 104m2. Ceir gwahaniaethau tebyg o fewn ardaloedd trefol hefyd. Yng Nghaerdydd, er enghraifft, y gwerth tir cyfartalog fesul metr sgwâr yn “Cyncoed 1” yw £2,246; tra yn “Pentwyn 2” cyfagos, y gwerth yw £565. Hynny yw, gwahaniaeth o £175,000 ar gyfer eiddo preswyl cyffredin. Yn fwyaf nodedig, gwelwn mai’r gymdogaeth sydd â’r gwerth tir isaf yng Nghymru yw “Castell 2 Gogledd” yn Abertawe, gyda phris negyddol o -£135, tra  bod gan y “Castell 7 Dwyrain” cyfagos werth tir positif o £1,594  y metr sgwâr.

Mae prinder tystiolaeth ar yr hyn sy’n achosi’r gwahaniaethau sylweddol hyn mewn gwerthoedd tir yng Nghymru. Yn gyffredinol, credir bod gwerth ariannol tir yn cael ei bennu’n bennaf gan ddau  ffactor: lleoliad y tir a’r ddefnydd a ganiateir. Pennir hawliau defnydd – boed hawl i godi ffatri, swyddfeydd neu dai arno – gan y system gynllunio, ac mae’r rhain yn esbonio’r gwahaniaethau enfawr rhwng prisiau tir amaethyddol a phreswyl. Mae gwerth lleoliad yn dibynnu ar nifer o ffactorau, megis ansawdd isadeiledd (gan gynnwys ffyrdd, rheilffyrdd a band eang); ansawdd gwasanaethau ac amwynderau lleol (gan gynnwys ysgolion, ysbytai a siopau); ffactorau amgylcheddol (fel llygredd aer a sŵn); a chryfder marchnadoedd llafur lleol. Mae’r holl elfennau hyn y tu allan i reolaeth  uniongyrchol y tirfeddiannwr. Fe’u pennir gan weithredoedd a phenderfyniadau’r gymdeithas ehangach – megis penderfyniadau ynghylch buddsoddi mewn isadeiledd a’r ddarpariaeth o wasanaethau cyhoeddus.  O ganlyniad, mae gwerthoedd tir a pholisi cyhoeddus wedi’u cydblethu’n agos. Mae tystiolaeth  o fannau eraill yn y byd yn dangos sut y caiff gwelliannau i seilwaith a gwasanaethau lleol eu ymgorffori mewn prisiau tir. Er gwaethaf, nid yw pwysigrwydd y gwahanol elfennau hyn wedi cael eu ystyried yn fanwl yn y cyd-destun Cymreig ac mae angen ei archwilio’n ddyfnach.

Ffigur 1: Gwerthoedd tir preswyl yng Nghymru.
(Mae arlliwiau tywyllach yn cynrychioli gwerthoedd tir uwch fesul metr sgwâr o eiddo preswyl)
Ffynhonnell: ap Gwilym et al (2020)

[1] Cyflawnwyd y gwaith hwn ar ran Llywodraeth Cymru. Ceir yr adroddiad llawn ar https://llyw.cymru/treth-gwerth-tir-leol-asesiad-technegol.


The Value of Land in Wales

Blog post by Dr Rhys ap Gwilym, Senior Lecturer in Economics at Bangor University’s Business School.

At the start of a year when it has been reported that Elon Musk has replaced Jeff Bezos as the world’s richest person, we might be forgiven for believing that the nature of wealth in the 21st century has changed beyond recognition. However, the wealth of tech billionaires, built on the ephemeral foundations of innovation and intellectual property, is an exception. The vast majority of wealth in modern, developed economies consists, as it has throughout human history, in physical property and, most notably, in land ownership. According to the ONS’s UK Balance Sheet Estimates, land represents 57% of aggregate net worth in the UK (see table 1).

Land ownership remains a cornerstone of economic and political power, and yet our understanding of who owns land in Wales, and what that land is worth, remains at best patchy. If we want to have informed debates about economic inequalities, about the impact of second-home ownership or the gentrification of our inner-cities, then we need first to equip ourselves with this basic information.

Table 1: UK Balance Sheet, end of 2019, £ trillion
Dwellings1.9
Other Buildings1.8
Machinery & Equipment0.6
Intellectual Property0.3
Inventories0.3
Land5.7
Financial Assets/Liabilities-0.6
TOTAL10.0
Source: ONS

So how much of that £5.7 trillion of land value in the UK relates to Wales? My best estimate is that land in Wales has a combined financial value of around £152 billion, or 2.7% of the UK total. That compares with our 4.6% population share, and 3.5% share of UK GDP.

Table 2: Estimate of land values in Wales                  (£million) 
Land underlying residential properties113,43174.6%
Land underlying commercial properties (those which pay NDR)   27,60218.2%
Agricultural land8,1575.4%
Woodland2,8501.9%
TOTAL152,040100.0%
Sources: Residential and non-residential: ap Gwilym et al (2020) Agricultural: Welsh Gov (2019) and authors’ calculations Woodland: John Clegg (2019) and authors’ calculations

Table 2 provides a breakdown of the £152 billion aggregate by land type. The first thing to note is how the vast majority of land value, 75% of it, relates to residential properties, despite these properties accounting for only 2.6% of all land (see table 3). Commercial properties make up a further 18% of land values despite accounting for only a fraction of 1% of land. Agricultural land (widely defined to include rough pastures) and woodland account for over 90% of Wales’ surface area, but only for a little over 7% of its land value.

The value of agricultural land and woodland have been estimated at the aggregate level and further work needs to be done to model these values at a disaggregated level so that we can get a clearer view of how land values in these sectors vary across the country.

Table 3: Land Use in Wales                  (hectares) 
Agricultural1,073,09050.6%
Forestry and woodland   321,72115.2%
Rough grassland and bracken   305,78014.4%
Natural and semi-natural land   220,37210.4%
Residential buildings     9,7900.5%
Residential gardens 43,9062.1%
Transport and utilities60,1482.8%
Industry, offices, retailing etc     4,1230.2%
Community buildings     6,1860.3%
Outdoor recreation    18,1220.9%
Unidentified / other33,8961.6%
Water    24,2721.1%
TOTAL2,121,406100.0%
Source: OS land use data and authors’ calculations

The land values for residential and commercial properties, on the other hand, are based on detailed modelling carried out by my colleagues and myself at Bangor University, as part of an assessment of the feasibility of a Land Value Tax.[2] Our modelling work estimated that the total value of residential land in Wales is £113.4 billion, representing 48% of total residential property values (the other 52% being accounted for by the buildings located on the land).

This bald average, however, hides the massive variation in residential land values across Wales. Figure 1 illustrates these differences, with darker shades of green representing higher land values per metre square of residential property in a neighbourhood, and lighter shades representing lower land values. We estimate that the average value of residential land in the most expensive neighbourhood in Wales – Tenby South 1 – is £2,589 per square metre. At the other extreme, 0.9% of all neighbourhoods across the country have negative land values. That is, the market price of a house built on an average piece of land in one of these locations would be less than the construction cost of the house.

When we did this work, the biggest surprise for me was the extent to which our model re-enforced my pre-conceptions. The very highest land values are concentrated in Cardiff, the Vale of Glamorgan and in holiday-home hotspots such as Tenby, Abersoch and Newport (Pembs.). The cheapest land is found almost exclusively in the swathe of post-industrial communities in the south Wales coalfield.

What is striking in our results is quite how localised some residential land markets are. In the case of Newport (Pembs.), the average land value per square metre of residential property is £2,201, compared to just £855 in the neighbouring area of Dinas Cross. That translates into a £140,000 premium on a typical residential property of 104m2. Similar stark differences exist within urban areas. In Cardiff, for example, the average land value per square metre in “Cyncoed 1” is £2,246; whilst in neighbouring “Pentwyn 2” the value is £565. That is, a £175,000 difference for an average sized residential property. Most notably, we find that the neighbourhood with the lowest land value in Wales is “Castle 2 North” in Swansea, with a negative price of -£135, whilst the neighbouring “Castle 7 East” has a positive land value of £1,594 per metre square.

We have a paucity of evidence on what drives these acute differences in land values in Wales. In general, the financial value of land is believed to be determined predominantly by two factors: the location of the land and its permitted uses. Permitted uses – whether a factory, offices or houses can be built on it – are determined by the planning system, and explain the huge disparities in the price of agricultural and residential land. The value of location depends on numerous factors, such as the quality of infrastructure (including roads, rail and broadband); the quality of local services and amenities (including schools, hospitals and shops); environmental factors (such as noise and air pollution); and the strength of local labour markets. All of these elements are outside the direct control of the landowner. They are determined, instead, by the actions and decisions of wider society – such as decisions regarding infrastructure investment and public service provision. In this way, land values and public policy are closely intertwined. Evidence from elsewhere in the world shows how improvements to infrastructure and local services get capitalised into land values. The relative importance of these different elements in a Welsh context, however, is poorly understood and requires deeper examination.

Figure 1: Residential land values in Wales.
(Darker shades represent higher land values per metre square of residential property)
Source: ap Gwilym et al (2020)

[2] This work was carried out on behalf of the Welsh Government. The full report can be found at https://gov.wales/local-land-value-tax-technical-assessment.

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