Leasehold Houses, Why?

[poppet2 13]

It's unheard of down south to have a leasehold house, so why is it more common up north? 

[CLECKHECK 10]

I think it's something to do with how the builder/developer acquired the right to build houses on land, and sell them, without actually buying the land on which they wanted to build; hence the term ground rent.

[willman 10]

Yet HRH Prince Charles own loads of properties down south that are all leasehold - including Lords Cricket Ground i think i read this week.

Edited February 10, 2021 by willman

[CLECKHECK 10]

7 minutes ago, willman said:

Yet HRH Prince Charles own loads of properties down south that are all leasehold - including Lords Cricket Ground i think i read this week.

I'm no expert in these matters but I suppose that HRH (in whatever capacity he owns the freeholds) receives ground rents even though the properties themselves on his land are not owned or used by him?

[willman 10]

Exactly that .

 

[Annie Bynnol 612]

The Prince of Wales "...has used a secretive procedure to vet three parliamentary acts that have prevented residents on Prince Charles’ estate from buying their own homes for decades...",  Guardian 9/2/2021

Both he and his "company" got to see future Government legislation a his company the "... £1bn Duchy of Cornwall estate was later given special exemptions in the acts that denied residents the legal right to buy their own homes outright."

 

This "company"  is inherited only by the first born males(unlike the throne) and no female can inherit the £1billion estate. 

The desperate need for male heirs will continue as the estate will revert to us if their is no son. 

A female Queen could lead to some minor royal getting their hands on all the property and money.

 

The estate assets cannot be sold but the Prince of Wales does not have to pay any Corporation Tax or Income Tax. 

He does pay a voluntary amount of "Income" Tax based on accounts that are not  audited by the NAO. Wikipedia Duchy of Cornwall

 

Edited February 10, 2021 by Annie Bynnol

[AKAMD 0]

Historically, the Duke of Norfolk owned much of the land in Sheffield.  Not sure how much he owns now but no doubt he will still be in receipt of much annual ground rent. 

[CLECKHECK 10]

I  once owned a house on a private estate on land originally owned by the Duke of Norfolk.  When I bought my house the  ownership of the freehold had been acquired by "United Sheffield Hospitals".  Once a year a Sheffield firm of solicitors sent a bill on their behalf for ground rent; this was for a very small sum [about £10]. Then I received a notification indicating that this charge was no longer to be levied because it was costing more to collect than the income generated.  As far as I can recall when I sold the house it was still leasehold but neither I nor the purchaser had any problems because of this.

[poppet2 13]

Yes, but how long was the leasehold for, and if it was a short leasehold, you would find it very difficult to sell, and possibly to a cash buyer only, paying less than you paid for it. 

[Jeffrey Shaw 90]

Al of the posts above are wrong, I regret, and they smack of lack of background knowledge.

 

Houses are leasehold in industrial areas for these reasons:

1. Until WW1, fewer than 5% of houses in E&W were owner-occupied. Virtually everybody had weekly-rent tenancies.

2. The Industrial Revolution, however, put sizeable wages in workers' pockets each week, for the first time.

3. So Building Societies were formed, in order to finance house purchase- most BSs originate in the I.R. period (1850-1900ish).

4. There was no T&C Planning legislation until 1947.

5. Positive covenants do not work very well on freehold properties.

6. So the only way of prohibiting noisy/smelly use was by leasehold covenants (e.g. no tallow chandling, tripe boiling, etc.)

7. Stamp Duty used to apply to land transactions. There were various steps at which the SD rate increased (e.g. >99yrs., > 999yrs.)

8. So leases tended to be for 99 or 99yrs in many cases.

9. Fast-forward to 1950/1960s. The 99yr leases characteristic of South Wales were ending. Landlords were demanding over-large premiums  (prices) for Deeds of Surrender and Regrant that would renew the lease's term.

10. So in South Wales, a Labour heartland, backbench MPs' constituents told them that they could say goodbye to their rock-solid majorities unless they did something about it all.

1. Hence the Leasehold Reform Act 1967.

 

= nothing to do with either The Crown or The Price of Wales.

[topflat29 10]

Copied from RICS  :   Guidance Notes on  1967 Leasehold Reform Act  (  Notes  issued  Dec 2015) 

 

When originally enacted the 1967 Act applied to ‘lower’ value houses and gave tenants the right to take either an extended lease or to enfranchise (buy their freehold interest). The principle behind the basis of valuation (section 9(1)) was that the land (the site) belonged to the freeholder, and the building (the house) belonged to the tenant.

Following the subsequent amendments there are five areas of valuation:

• the extended lease (at a modern ground rent)

• section 9(1) (no marriage value payable)

• section 9(1A) (marriage value payable)

• section 9(1C) (like 9(1A) with compensation) and

• section 9(1AA) (vacant possession value, subject to assumptions).

 

The Basis of Valuation : the land belonged to the freeholder and the building ( house )  belonged to the tenant.

 

Why hasn't this "basis of valuation"  applied to blocks of flats ?

Edited February 15, 2021 by topflat29

[Jeffrey Shaw 90]

Largely because a flat's tenant (leaseholder) does not have an individual right to enfranchise.

Oh, and that so-called 'principle' is illusory.

Whether a freehold or a leasehold, estate ownership includes (unless explicitly excluded):

a. the building;

b. the land on which it stands; and

c. the airspace above it.

The title deeds (inc. lease) often cut-down that extent. Even a freehold might exclude the mines and minerals below ground.