Plans To Abolish 'Feudal' Leasehold System In England And Wales Dropped

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Almost  20% of housing stock  in E & W  is sold under leasehold title .    The properties  are  sold under 99 year  or 125 year leases , which can be  sold / transferred   to the next buyers  etc ,  until the lease term  falls  to   expiry, when the premium  falls to zero.

 

When  property  under freehold title  is purchased , the buyer becomes the legal owner of the property.       When property under leasehold title is purchased , the buyer becomes the long term rental tenant   who pays  annual  ground rent and service charge for 99 or 125 years.     The leaseholder pays for everything  under the leasehold property system   but  gets  no interest in  the freehold title.  We can estimate that 5Mil leasehold  units  (  at  £250,000 each  ) = £1.25 Trillion  will be  lost  over 125 years .

 

The  lease  is  recognised  by  successive  Housing Ministers   as  " a   contract  on   unfair terms for leaseholders"  ,   but  these  leases   are  protected by the Government  , by foolish decision  and £1.25 Trillion will be lost   .

 

 

[Jeffrey Shaw]

1. No, not all leases are for 99yrs or 125yrs; and not all leases reserve Service Charge: only those where there are communal services to be provided (i.e. mostly on blocks of flats).

2. A leaseholder's ownership is pre-defined before it's ever purchased- so the leaseholder can hardly argue that it all came as a surprise!

3. No changes to the law can abolish Service Charge, anyway- and nor can assets be expropriated without  compensation, either.

4. Finally, you're wrong to claim that "When  property  under freehold title  is purchased , the buyer becomes the legal owner of the property." A freeholder is a fee simple tenant of the Crown; and a leaseholder is a tenant of the freeholder.