Sir: You have had a nice piece of special pleading
from Mr P.F. Loder Dyer (Let- ters, 20 February) neatly based on Pierre- Joseph Proudhon's maxim that property is theft (`La propriete c 'est le vol') with its Jacobin echoes. There is a fundamental misunderstanding here, and it is not sur- prising that it should be so because a diffi- cult concept is involved. First, let us consid- er property as a form of investment; houses and flats, equally with shops, offices and warehouses, can be bought and let, or bought when let, to produce income. A typ- ical residential tenant in Mayfair, Belgravia or Chelsea has paid a premium for an exist- ing lease and that premium was the mea- sure in capital terms of the difference between the rental value of the flat or house and the rent actually payable to the landlord, with a notional deduction for amortisation — the replacement of capital. It is the departing tenant who takes the premium, not the landlord; the former has sold his leasehold interest for what it will fetch.
The head landlord receives the ground rent and, in the long run, when the lease expires the property becomes his to re-let at a market rent, or at a premium. Ninety- nine years before all this the ground lease was granted by the freeholder at a rent which allowed the lessee developer a return on his investment in bricks and mortar he could sublet at an enhanced rent — and which gave him an opportunity to amortise his expenditure.
The Government's legislation envisages not a new lease at a fair modern rent but a tenant's statutory right to buy the freehold from, by definition, an unwilling landlord.
But why should he be forced to sell ? He is not forced to sell his equity investments or his gilt-edged securities — or his horse, his rod or his gun. Your self-drive hire pro- prietor can buy a motor-car and let it out without the risk of the hirer forcing him to sell it outright. Why then should the Cado- gan or Grosvenor Estates or Smith's Chari- ty be described as 'unscrupulous land- lords'? It is the Government that deserves the epithet unscrupulous for benefiting a wealthy tenant at the cost of a wealthy landlord. This is confiscation — you might as well stop a man letting anything.
J.R.E. Sedgwick
Pasture House, Whitsbury, Near Fordingbridge, Hampshire
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