To what extent capitalist production has revolutionised the building of houses in London is shown by the testimony of a builder before the banking committee of 1857. When he was young, he said, houses were generally built to order and the payments made in instalments to the contractor as certain stages of the building were being completed. Very little was built on speculation. Contractors used to assent to such operations mainly to keep their men in constant employment and thus hold them together. In the last forty years all that has changed. Very little is now built to order. Anyone wanting a new house picks one from among those built on speculation or still in process of construction. The builder no longer works for his customers but for the market. Like every other industrial capitalist he is compelled to have finished articles in the market. While formerly a builder had perhaps three or four houses building at a time for speculation, he must now buy a large plot of ground (which in continental language means rent it for ninety-nine years, as a rule), build from 100 to 200 houses on it, and thus embark on an enterprise which exceeds his resources twenty to fifty times. The funds are procured through mortgaging and the money is placed at the disposal of the contractor as the buildings proceed. Then, if a crisis comes along and interrupts the payment of the advance instalments, the entire enterprise generally collapses. At best, the houses remain unfinished until better times arrive; at the worst they are sold at auction for half their cost. Without speculative building, and on a large scale at that, no contractor can get along today. The profit from just building is extremely small. His main profit comes from raising the ground-rent, from careful selection and skilled utilisation of the building terrain. It is by this method of speculation anticipating the demand for houses that almost the whole Belgravia and Tyburnia, and the countless thousands of villas round London have been built. (Abbreviated from the Report of the Select Committee on Bank Acts, Part I, 1857, Evidence, Questions 5413-18; 5435-36.)

The execution of enterprises requiring working periods of considerable length and operations on a large scale does not fall fully within the province of capitalist production until the concentration of capital becomes very pronounced, and the development of the credit system offers to the capitalist, on the other hand, the convenient expedient of advancing and thus risking other people’s capital instead of his own. It goes without saying that whether the capital advanced in production belongs to him who uses it or does not has no effect on the velocity or time of turnover.