OWD,
Some generalities to avoid getting too detailed. Leases are an historical throw-back to the Norman era. All land was vested in the King, William the Conqueror who then granted land to a supporter in return for a specific service. That service could be anything from entertaining the King and his retinue for X number of days, to raising a military force (e.g. x number of horsemen and y number of foot soldiers, or building a castle and maintaining the peace in a district. Usually the bigger the land grant, the more onerous the duties. Sometimes leases were granted for “grace or favour” i.e. essentially a gift, or granted on a “peppercorn rent” – when pepper/spices were a precious commodity. There had to be a “consideration” i.e. even a peppercorn, to make the lease contract valid.
These land leases led to the “aristocracy” and the distinction of class in the UK, and land ownership was very closely tied to the right to vote, a seat in the House of Commons (made up of commoners i.e. landowners,) or the House of Lords (basically senior knights / big landowners, Lords.) A Lord of a Manor is not the same thing. Farmland leases were usually granted for three lives, so it was in the interest of the lessee to spend money on drainage, etc., and the lessor took account of this. Many of the streets in London bear the names of their titled land-owners.
The situation on leases exploded during the reign of Henry VIII, after he got his hands on the monastic /church lands. Regularly the owner of the land granted a long lease to someone to build a house but retained ownership of the “plot” and in return charged the lessee “Ground Rent.” Where the plot was sold, the land was held Freehold, i.e. no rent was payable. In Ireland, the Church of Ireland (Anglican) obtained huge tracts of land after the dissolution of the monasteries and although I owned the freehold to my home, an extension built in 1906 on the adjoining land-plot was leasehold, 999 yrs from 1906, with £20 payable annually to Trinity College Dublin. Under a relatively recent Irish law I was able to buy-out that - on an agreed formula – cost me about a 10 times multiple, I think.
Where the property was important to the development of an area, longer leases were granted to “make it worthwhile” for a greater investment/bigger/better property. Many of the London residential leases are for periods of 999 years and although some are shorter, the lessees do have many basic rights that roughly approximate to property ownership. As far as I know, there are no personal tax advantages to leases, they have a value and can be transferred, so will be taxed on that value. Sometimes the leases can be “full repairing” i.e. the lessee must carry out repairs at his own cost; the odd wealthy dotcom millionaire has leased an old country house on that basis, and occupies it basically rent free in return for carrying out structural repairs, etc.
In Ireland land ownership was very different up to the Cromwellian era (1650), and also differed subsequently, even though it was supposed to be based on the UK model. It was largely the cause of conflict between the two countries for hundreds of years.
Expensive cars – car prices vary from country to country here in the European Union. Taking the average EU car price as 100, the price in France is 99, it is 101 in the UK and 132 in Ireland.
Hope this helps
Km
