Fleecehold

Leaseholds. Welcome to the jungle. With the exception of a few properties in the US and Canada, England and Wales are the only countries are the only countries where an owner of a building does own or have secure tenure over the freehold. This is a situation that is feudal, confusing and, therefore, shrouded in legal definitions. Fixing this will be complex and torturous. Ground leases exist all over the world and can often be about tribal lands, government land and private land; people will need to be compensated. Different forms of lease exist, some involve large upfront payments and some have annual payments which increase.

As you can see, this a mightily complex situation and one that successive governments have avoided. This has the effect of, apart from the kicking of the can down the road, embedding the problem over time and leads people to believe that attempting to address this is worthless. It should be held as a principal and very worthy.

Now comes the hard part.  In order that you tackle a difficulty, making certain that everybody is clear about the definition is vital. Many valuers face a dilemma; how do you value a property her when the end of the lease is near, especially if an expensive project has been added to the property? Then there’s the rub; leasehold properties are cheaper to buy, if you remove them from the market, what replaces them?

The fact that such a dilemma has to be faced should not deter the authorities from removing something feudal from the process.