Wales — The Leasehold Racket (1963)

From the May 1963 issue of the Socialist Standard

Every time the Minister of Housing visits South Wales he is met with demonstrators demanding reform of the leasehold system. All the capitalist parties in Wales have this reform, in one form or another, in their programme. This article looks at the situation from the Socialist point of view.

When it is said that housing shortages are caused by the sudden flow of people into the big towns it is not always remembered that the other side of this coin is rural depopulation. Traditionally Wales has been one of the areas from which people have moved to the cities of England, particularly Liverpool, Birmingham and London. It has, therefore, suffered from falling, as opposed to rising, land values and all that this means. Today this is no longer really a problem in South Wales, though it persists in the North and other rural areas.

But the aspect of housing which is causing the most anxiety at the moment is the prevalence of leasehold. There has been talk of finance corporations holding South Wales in an “octopus grip.” Nine-tenths of the area is supposed to belong to the big estates which were once the property of Tory landowning families, many of whom have now been replaced by capitalists interested in landowning solely as a business.

When urban development began in earnest in South Wales in the second half of the nineteenth century the principle of the 99 year lease was widely applied and now the effects are being felt. In addition there is at present a shortage of freehold land which is the result of the flow of industry and workers into the area since the war. The increased demand for “property” which this has caused has aggravated the problem by raising land values. When a leaseholder sees that his lease has only twenty to thirty years to run he begins to think about renewing it. The landlord knowing that there is a shortage of freehold land is able to demand what seems to the leaseholder a fantastic price for the freehold or a new lease. Thus the approaching end of many 99 year leases and the present shortage of freehold land has brought the problem of leasehold in South Wales to a head.

Some people object to leasehold on what they call principle. For the landlord lets the land and the lessee undertakes to erect a building on it, but at the end of the lease the land and the building revert to the landlord. At the turn of the century some of the more “ radical ” Liberals saw this as a gross injustice and as another example of the rapacity of landlords. As a solution they suggested leasehold enfranchisement which basically means that the tenant is given the right to buy out compulsorily the landlord. Significantly enough, in that it bears out our contention that the Labour Party is the political heir of some elements in the old Liberal Party (this is particularly evident in non-conformist Wales), the Labour Party is pledged to this policy of leasehold enfranchisement. And, of course, wherever there’s a petty reform to support we find the Communist Party—in Wales it has made itself conspicuous in the campaign against leasehold.

We must, however, see this problem in perspective. The usual leasehold arrangement is for the landlord to let the land to a speculative builder who erects houses on it for a profit. Two-thirds of leasehold property in South Wales is not occupied by the ground lessee but by tenants paying an ordinary house-rent. The Labour Party recognises this when it says it only wants enfranchisement for owner-occupiers. Although for historical reasons there is probably a higher proportion of homeowners in Wales than in most parts of Britain this question of leasehold is of little importance: its abolition would be at best another minor reform of capitalism.

Quite understandably people are upset when they are faced with the choice of quitting the house they have come to regard as their own or of paying an impossible price for the freehold. But this is capitalism. It brings insecurity to all workers, including those who happen to think they own their own homes. The whole problem shows that the home-owner is no more secure than the tenant and for the same reason—the poverty which capitalism brings to all its workers.

Labour M.P. George Thomas has said of the finance corporations: “They are cashing in on the labour of our community and stealing the reward of our labour.” They are, he said, “social parasites.” True enough, landowners are parasites. It is plain to all that they receive an income solely because they happen to own a certain part of the globe. They are among those who "possess but do not produce." But why stop here? These capitalists whose business is landowning are only a small section of the capitalist class. The rest, too, are social parasites.

Adam Buick