Of the various forms of rehabilitation of returned servicemen after the war, land settlement was the best known, the most expensive, and the least successful. Development was left to the individual who borrowed heavily. Unoccupied Crown land was insufficient and often unsuitable for the large number of men returning. Extensive purchases of private land were made during 1918–20, land that was eagerly offered to the Government at exorbitant prices and as eagerly demanded by land-hungry soldiers at uneconomic prices. The common expectation was, apparently, that the sharp post-war boom in export prices would continue. This land boom affected civilians, too, and created much of the excessive mortgage debt that caused trouble, as export prices soon receded and later collapsed in the early 1930s.

By March 1924, £22 million had been advanced to 22,000 ex-servicemen, including £8.5 million for houses other than on farms. Not all of this had to be borrowed; as much as £13.5 million came from accumulated surpluses of revenue in the Consolidated Fund.