Leasehold home ownership is in a state of collapse.
This study examines why it was thought workable in the past, and why it is losing function and credibility now.
Some academics focus on Modern Land Law,1 explicitly omitting history where possible. Others2 include history but lose sight of how and why artificial long leases had grown to such prominence by 1800 that Woodfall3 observed “half the titles in the Kingdom are so”.
Law study tends to focus on case precedents that, by the nature of litigation and its cost, either involve relatively short commercial leases; or rental situations that qualify for legal aid. The bulk of Middle England is left with a huge gap in legal understanding of the second most important mode of home ownership in the country. Modern teaching provides few answers, often treating the reversion as freely disposable. But homeowners do not buy promises from just anyone who might turn up later. The surrounding gaps in legal knowledge are causing a crisis of confidence in leasehold property.
Many consumers discover unexpected faults in leasehold and regret their purchase. A sector-wide complaint is that no regulator will intervene to sanction deception. Few complain further, because they realise or are soon advised that their only practical escape is to sell quietly and move on. Some are advised to ‘enfranchise’ to freehold which is bound to pose questions on the point of having leasehold in the first place.
Quite obviously, practice has lost its way, as have some academics.
We examine the major flaws in present practice one at a time:
- Ground rent is supposed but rarely exists.
- The Reversion is a future event taken out of context.
- The Estate in Land derives from common law principles that are now ignored.
Elizabethan statutes declared the pre-existing principles and set fixed penalties for fraud,
the second statute included prison sentences for conveyancing fraud,
but both statutes were repealed in 1925 making the common law less clear.
- Therefore, fraud has returned, involving
(a) evasion of the fundamental duty to HOLD, incorporating
(b) ground rent sale posed as the spurious excuse for
(c) registration of land transfers without the true owners’ consent.
- Consequences fall into two categories:
(a) evasion of responsibility by the Lessor (and in some ways by government), and
(b) exploitation by the uninvited third party specialist.
- Typical overall results are:
(a) inescapable increases in mortgage dues,
(b) eventual foreclosure, forfeiture, or both, and
(c) irresponsibility for bad building and dangerous structures.
This project documents the erosion of institutional reliability, the collapse of saleability, the persistence of dangerous structures, and the national pattern of predatory financial extraction carried out by a relatively small number of individuals operating multiple companies for that purpose. It aims to clarify how these failures have developed, and what the consequences and implications are for ordinary people, for the housing sector, and ultimately for government.