First, it is worth remembering that not all the aristocracy have suffered this decline. The Grosvenor family, for example, headed by the Duke of Westminister, have a wealth of approximately £8billion. The Duke is the richest British born person (other richer people in the UK are all foreign). The Earl of Cadogan is also a billionaire, whilst many other members of the aristocracy take their place in the lower numbers of the UK rich list.

To understand the wealth of the aristocracy, you need to understand where it comes from. Peers (generally) made their money from owning land and renting it out to other people. This is why the Duke of Westminister is so rich - he owns a large chunk of central London, a very valuable asset which also generates a huge income. Few other aristocrats have owned such valuable land and have struggled to enjoy the same amount of revenue, particularly as income from land has fluctuated over recent history.

In addition, the taxation policies which were in place for much of the post-war period severely diminished the earning power of the aristocracy. Until the mid-1980s taxation on unearned (ie investment and rental income) was around 90%. This meant that the aristocracy were unable to keep much of their income, and so struggled financially. Many aristocrats also lost vast sums of money in the crises that affected the traditionally safe investments in Lloyds during the 1980s and 1990s.

The other thing to remember is that old country houses are very expensive to run. They are centuries old and built in ways that need regular maintenance. I'm no expert on what this costs, but I have some experience working with these sorts of people in my field - the upkeep of a modest country house could easily be £25,000 a year. This will be even more when things have to be repaired.

There is also the issue of inheritance tax. In the UK this sits at 40%, and aristocrats have often failed to mitigate it. For a lot of the 20th century, peers cut deals with the treasury whereby their houses became property of the National Trust, and open to the public. As a result the family were able to keep living in the house, and protect their more income rich assets from the taxman.

Finally, the decline of the peerage of an institution has also affected our modern day perception of the wealth of the aristocracy. Throughout history families have risen and waned, but as their money declined they kept their titles until the line went extinct. Up until the early/mid twentieth century, there was also a flow in the other direction - middle class people would get rich and then be ennobled, leading to a new corps of rich aristocrats. As the award of hereditary peerages declined (only 3 non-royal hereditary peerages have been created since 1964) we have lost the idea of the most successful being ennobled (though often life peers are given to wealthy businessmen), hence we are left with poor old aristocrats and few rich new ones.

The declining value of agricultural land relative to industry through the 19th C., also with the factors of the American West increasingly supplying cheap grain, trade with the Empire and an increasing political will toward democracy and redistributive taxation.

The first Death Duty was introduced in 1796, partly as a reaction to the forces in play in the French and American revolutions. They were increased over time, particularly in 1894. By 1910 the "People's Budget" further increased both income tax and inheritence tax, and proposed (but dropped) a land tax. That led directly to the Parliament Bill of 1911, which greatly reduced the political power of the unelected House of Lords.

Social change and taxation during and following the two World Wars continued the trend toward a more egalitarian and social-democratic society. Keegan talks a bit about the melting-pot effect of the trenches in "The Face of Battle", where the upper class junior officers lived side-by-side with the working classes for the first time, giving each an appreciation of the humanity of the other.

Of course, not all the aristocracy has vanished, some managed to diversify their wealth, entrench their social position and florish in a rapidly changing world. However, it is greatly depleted in number and influence from the 18th C.

Main source is David Cannadine's "The Decline and Fall of the British Aristocracy"

In the UK when you die the people who inherit your estate pay 40% tax on all your assets over £325,000 (married couples can combine this).

There is a exemption for "buildings of outstanding historic or architectural interest" or "objects which have national scientific, historic or artistic interest" providing they are be made available to the general public to view.

Let the plebs in for a couple of days a year and it saves a huge amount of tax.