Replace flat land intensity ratio with region-specific ratios

[vahid-ahmadi]

Problem

household_land_value.py applies a single national intensity ratio (0.673) to convert property wealth into land value for all regions. This produces implausibly flat regional land values — London appears mid-table and South West ranks above it, contradicting all official data.

This was identified in PolicyEngine/policyengine-uk-data#314, which documents the full evidence and discrepancies.

What needs to change

In policyengine_uk/variables/household/wealth/household_land_value.py, replace:

property_wealth_intensity = (
    wealth.land.value.aggregate_household_land_value / wealth.property_wealth
)
return property_wealth * property_wealth_intensity + owned_land

With region-specific intensities:

region = household("region", period)
regional_intensity = parameters(period).household.wealth.land.intensity.property_wealth_by_region[region]
return property_wealth * regional_intensity + owned_land

Regional intensity ratios

Derived from MHCLG Land Value Estimates (2023) via the residual method:

land_per_dwelling = mhclg_land_per_ha / dwellings_per_ha  (central scenario)
intensity = land_per_dwelling / avg_house_price            (UK HPI Dec 2025)

Building costs are roughly uniform nationally, so the land share of property value is much higher in expensive areas.

Region	HPI avg price	Intensity	Source
London	£551,294	0.85	MHCLG + UK HPI
South East	£378,800	0.65	MHCLG + UK HPI
East of England	£338,002	0.60	MHCLG + UK HPI
South West	£301,226	0.58	MHCLG + UK HPI
West Midlands	£246,141	0.52	MHCLG + UK HPI
East Midlands	£243,632	0.48	MHCLG + UK HPI
North West	£217,428	0.47	MHCLG + UK HPI
Yorkshire	£208,447	0.46	MHCLG + UK HPI
Scotland	£190,649	0.44	Interpolated from NE/NW
Wales	£214,883	0.47	Matched to North West
North East	£165,257	0.42	MHCLG + UK HPI

Scotland and Wales are interpolated from the nearest English region by house price (MHCLG covers England only).

These should be added as a new parameter node under household.wealth.land.intensity.property_wealth_by_region.

Data sources

• MHCLG Land Value Estimates for Policy Appraisal 2023 — residential land per hectare and density by LA
• UK House Price Index Dec 2025 — regional average house prices
• ONS National Balance Sheet 2025 — aggregate constraint

Related

• Regional property wealth calibration: WAS-imputed main_residence_value doesn't match UK HPI by region policyengine-uk-data#314 — regional calibration targets and full evidence table