How to end property speculation

Since the war over a hundred people have become millionaires out of property speculation. This is a measure of the failure of town planning. Indeed it has partly been its effect within the context of the private ownership of land.

The private landowner is a social parasite extracting an income from society simply because he monopolizes a limited natural resource. A large part of London is still owned by the traditional landowning class — the dukes, the earls, the Church and the Crown — but in recent years these aristocrats have been joined by a commoner breed: the property speculator.

The property speculator operates by exploiting the shortage of land for office building in central London. Land prices depend entirely on market demand and reflect the prospective income a piece of land can be expected to bring its owner. For many years now the demand for land in London for office building has exceeded the supply. Hence rising land values.

What most of these new millionaires did was to buy up land in a particular area, secretly and in small parcels, until they had acquired an area large enough for a big “development”. As soon as they had done this their land became worth many times more than they had paid for it. Some became millionaires quite literally overnight and, with office rents rising faster than inflation generally, they go on getting richer every day simply by holding their land idle. This basically is what Harry Hyams has done with Centre Point, that monument to the anti-social nature of private property at the end of Tottenham Court Road. It pays him more, through the increasing value of his land, to keep this office building empty rather than to let it at a fixed rent for a fixed period.

So obviously absurd is this that even supporters of capitalism have had to complain. The Tories have traditionally been the property owner’s friend so they have not done much. The Labour Party has tried harder, but its efforts to control speculative office building backfired by aggravating the shortage of office space, so further pushing up land prices. Labour apparently has not learned the lesson of this as its GLC manifesto promised “to halt the building of additional offices”. Some Labour-controlled councils have even been forced into partnership with speculative office builders in order to salvage some space near central London for housing.

Both Labour and Liberal critics of the property speculator have shied away from what, even under capitalism, is the only way to stop people making fortunes out of rising land values: the abolition of private property in land by the expropriation without compensation of all private landowners. This radical solution was advocated by their bolder predecessors in the 19th century and has been recognized by many architects to be the minimum requirement before there can be effective town planning.

The Socialist Party of Great Britain however does not advocate the abolition merely of landed property and does not favour this as an isolated measure. We stand for the abolition of all private property rights, over industry as well as land. The abolition of the private ownership of land under capitalism would eliminate the landed aristocrat and the property speculator but not the industrial capitalist. It might relieve the housing shortage a little by allowing more lower-rent accommodation to be built for sale to lower-paid workers, but the working class would remain wage and salary earners exploited for profit by their employers. Under these circumstances town planning, even with the abolition of private landownership, could still not be geared to furthering human welfare.

Only Socialism, based on the common ownership and democratic control by all the people of all land and industry, will provide the framework for doing this. There would then be no vested interests or market forces working to negate plans to create an enjoyable urban environment for people to live and work in. People would be able to exercise effective democratic control over town planning instead of the farce of “consultation” and “participation” practised by the GLC and local councils today.