It is still not known whether the places that people live affect their mental health. The principal aim of this 1991 study was to quantify simultaneously variance in the prevalence of the most common mental disorders, anxiety and depression, in Britain at the individual, household, and electoral ward levels. Data from a cross-sectional, nationally representative survey of 8,979 adults aged 16–74 years living in private households nested within 642 electoral wards in England, Wales, and Scotland were analyzed by using multilevel logistic and linear regression. Common mental disorders were assessed by using the General Health Questionnaire. Less than 1% of the total variance in General Health Questionnaire scores occurred at the ward level. This variance was further reduced and was no longer statistically significant after adjustment for characteristics of persons. By contrast, the proportion of total variance at the household level (14.4%, 95% confidence interval: 11.4, 17.5 in the null model) (p < 0.001) was statistically significant and remained so after adjustment for individual- and household-level exposures. While these findings suggest that future interventions should target persons and households rather than places, further research is first required to establish whether other (particularly smaller) areas lead to similar results.