When it closed, the government of the day looked forward to selling the land for development. They simply assumed that they owned the land as the hospital was by then part of the National Health Service and all hospital sites were government enormously valuable - they received a polite letter from the Duke of Westminster, whose family, the Grosvenors, own much of the land in Belgravia and Mayfair. The letter pointed out that the land on which the hospital was built was owned by the Grosvenors and not by the government. The government thought they were safe when they realised they had a ninehundred-year lease on the ground, but again they were thwarted by the original deeds for more than two centuries.
The government certainly did own a very long lease on the land on which the hospital was built; that much was agreed, but when government officials were invited to take a careful look at the terms of the lease they discovered that it remained valid only if the land continued to be used for a hospital. Since a hospital was no longer required, the land reverted to the Grosvernors and the government was left with nothing.