ONE of the perils of buying a house in England is the practice of leaseholding.

And there are lots of problems for leaseholders as highlighted in Andover through the Advertiser (August 31, ‘Home buyers hit out at ‘farcical’ scheme’).

A leasehold means that whilst you might own the building, you do not own the property. Therefore, you have a right to occupy the building for as long as the lease is valid (nowadays often 99 years), and the lease can be sold on.

The relationship is similar to that of landlord and tenant, but, and there is a big but.

Freehold on the other hand means that you own both the property and the land. The big but concerns additional terms hoisted onto leaseholders, often resulting in unfair practices, and proposed law changes aim to tackle some of the worst practices including ridiculously excessive service charges.

There are about four million leasehold properties in the UK of which 2.6 million are flats and the rest houses.

The freeholders for these properties are often the builders of housing estates. Specialist freehold companies have also emerged. Freeholders can make money from annual ground rents, maintenance charges, and fees for permissions to do all sorts of things including building extensions. The problem is that freeholders are exploiting legal loopholes to extract money from leaseholders.

Freeholders often gamble that leaseholders are buried in legal jargon and do not have the money or stamina to take them to court.

The consumer group Which? has revealed that many developers sell on the freeholds of newly built houses to third party companies whose role is to make as much profit as possible and this is done by raising charges for managing the development.

Citizens Advice pointed out one recent case before the Supreme Court where the initial service charge was £90 but increased by 10 per cent each year, and at the end of the 99-year lease, the annual payment would be over £1 million. Which? also reported examples of charges: £252 to own a pet, £60 to install a door bell and £2,500 for a conservatory.

Maintenance charges are a key area of abuse, and the relationship is not as well defined as that of a normal landlord / tenant.

In London, following Grenfell, leaseholders in a block of flats were told they faced charges of between £13,300 and £31,300 a flat to cover safety work. The question is what was happening to the maintenance monies and were leaseholders paying for the mistakes of the management company? In this case, the management company eventually took on the costs.

The current rules favour freeholders and the attempts to change the law are welcome, especially making it easier for leaseholders to buy the freehold. In Scotland, leaseholding does not exist, and frankly I do not understand why new builds should be leaseholds and perpetuate feudal practices. There is also a lack of transparency on what you are buying, as highlighted by the Advertiser.

Leaseholdings carry risk and should be identified by bright flashing lights.

Luigi Gregori, Charlton Road, Andover.