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This paper is concerned with behavioural responses to reviewed ground rents in New Zealand. The focus is on how freehold growth information is interpreted when considering reviewed ground rents on ground leasehold value.

Semi-structured interviews were conducted with ground leaseholders to inform the design of a controlled experiment. The interviews revealed that (a) purchasers tended to directly compare freeholds to ground leaseholds and (b) used rudimentary valuation methods. In the experiment, 40 property investors were requested to estimate the ground leasehold value close to the ground rent review time. Thereafter, 20 of the investors reassessed their ground leasehold value estimate using a projection of the future ground rent and a statement as to freehold growth (treatment). The control group of the remaining 20 investors received the estimate of the future ground rent only.

The tendency for higher treatment group valuations indicated the growth information was too available. Comparing ground leaseholds directly to freeholds, rather than thinking about the cost implications, is attributed to a manifestation of the availability heuristic.

The study involves a typical ground lease arrangement (as verified by experts) in the New Zealand market where there are few protections for ground leaseholders. These findings justify prohibiting new ground leases where the ground rents are set by reference to freehold land value.

This paper extends behavioural theory (availability heuristic) to explaining human interaction with ground leaseholds.

Although several factors influence property value determination depending on the market, relevant studies in sub-Saharan Africa (SSA) often fail to analyse the impact of factors, such as unexpired term of leasehold interest and ground rent, which are also germane to market transactions and value determination. This study aims to examine the effect of unexpired term of leasehold interests and ground rent on the valuation of residential properties in Ghana.

A questionnaire instrument was used to collect the views of a sample of professional real estate valuers on the relevance of these and other factors that affect value. In addition, the valuers were tasked to value a residential property located in Accra, Ghana. Ordinary least squares and quantile regression models were thereafter used to analyse the data to determine the effect of the subject variables on value.

The study finds a significant relationship between valuers’ views on the relevance of unexpired term of leasehold interest and the value placed on residential properties. Further, the respondents who viewed ground rent as an important factor in estimating values placed significantly lower values than those who viewed it as less important.

The findings suggest that the respondents may have split opinion on the existing anecdotal evidence that market participants ignore the unexpired term of leasehold interest, an issue that should be settled in theory. The findings also highlight the diversity of opinion on some of the fundamental factors that affect value and the need to build consensus to prevent excessive variation in value estimates among valuers.

The study makes a significant contribution in terms of extending the existing literature by analysing the impact of unexpired term of leasehold interests and ground rent on residential property values based on empirical data, issue(s) which have often been ignored by existing studies. Findings from the study also provide insights into additional possible causes of valuation errors in Ghana and SSA, which are useful for policy formulation and practice.

Advances an alternative method of analysing the market price of leasehold investments for use when assessing the market price of a comparable investment. The method can be adapted to evaluate investment worth by substituting rental growth forecasts for those implied by market price levels. Baum and Crosby highlighted the inadequacy of current dual rate valuation methods for leasehold investments and the problems associated with the contemporary approach. Their work is used as the basis for this article. A discounted cash flow (DCF) approach is developed using an analysis of target returns. The all risks yield (ARY) and target return are first assessed on the basis that the investment is freehold but otherwise identical. The implied annual growth rate in CRV is then calculated using the equated yield formula. It is then argued, that because this growth in CRV arises from the location and quality of the building, it is equally applicable to a leasehold interest in that building. This leaves only the target return for the leasehold interest to be established, for a DCF valuation to be possible. Market transactions in leasehold properties are analysed in terms of target return to illustrate how statistical evidence of market sentiment can be accumulated. This evidence is based on the “extra return” required for leasehold investments over comparable freeholds. It will be shown that this “extra return” requirement is not materially affected by the freehold target return initially selected in order to carry out the analysis. The method accordingly appears reliable.

The aim of this Real Estate Insight is to comment upon the UK leasehold system, particularly focussing on new-build homes. This paper sheds light on the controversy surrounding this practice, public perception and the impact of a proposed ban on the housing and the impact, thereof, on property investment.

This Real Estate Insight, through the lens of investment principles, dissects the rationale behind the initial pricing in the leasehold system and how potential future costs and benefits shape this mechanism. The nature of the “Insights” briefings means that this is a personal view of the author.

With the recent outcry over perceived unfair practices, the paper scrutinises whether the problem lies within the system itself or in the consumers' comprehension of the system. This paper suggests that enhancing consumer education and imposing stricter disclosure requirements might serve as a more effective solution than outright legislative prohibitions.

The paper also briefly touches upon the concept of “gouging” in market function, highlighting potential inconsistencies in consumer behaviour.

This is a review of the UK leasehold market in relation to the legal title being offered at purchase.

The purpose of this paper is to investigate the impact of land tenure on housing values in metropolitan Kampala.

A hedonic model is used to test the relationship between housing prices, land tenure and housing attributes using a cross-sectional dataset of transaction prices for 590 newly built houses sold in 2011.

Public leaseholds in Kampala offer a premium of 23 per cent in housing values compared to freeholds. This could be due to a lack of formal systems for the assessment of leasehold premium and ground rent charges, an arrangement which can offer utility to the lesse at the expense of lessor, thereby making leaseholds popular on the market, or the developers’ lack of information on the benefits of freehold causing them to value leaseholds higher than freeholds. Similarly, private mailo tenure offers a 12 per cent premium in housing values compared to freeholds. There is no significant impact of Kabaka’s mailo tenure on housing values. When compared to private mailo, public leaseholds offer an 11 per cent premium in housing values.

There is a need to advance leasehold as the urban land tenure for Uganda, disentangle multiple-layers of ownership on mailo land and roll out the land fund to enhance growth of the housing market in Kampala.

This paper is the first of its kind to empirically examine the impact of mailo land tenure on housing values. Findings provide useful insights for investors and policymakers in the housing sector in Uganda.

The purpose of this paper is to review the historic evolution of dual rate valuation practice in the UK from the nineteenth century to the present time.

The paper is based on a review of published books, articles and letters dating from 1852.

The study establishes the fact that single rate was the only method in use in the nineteenth century and notes the overlap of two methodologies and beliefs in the first half of the twentieth century. It confirms that by the late 1930s dual rate had replaced single rate and an “establishment opinion” on the essential need to value leaseholds dual rate on the basis of a set of commandments had emerged without any apparent disagreement. This position, with some debated refinements for the effect of tax and treatment of variable profit rents, is shown to continue through the twentieth century and is reaffirmed in standard textbook teaching at the start of the twenty‐first century. The review touches on the criticisms noted by academics in the latter part of twentieth century. It identifies as a key issue the continuing persistent misconception amongst UK valuers that there is a reinvestment assumption in the present value of £1 per annum.

Dual rate principles are shown in the paper to be untenable and the profession is advised to remove the method from future training of valuers and to cease to make any use of the method in the valuation of leasehold investments.

Dunkin’ Donuts is a global retailer of coffee and bakery products. The company is 99 per cent franchised and has used the franchising system as a route to market entry and expansion worldwide. The original historic roots of the company are in the USA and despite wide international expansion since the 1970s, the US market continues to serve as a testing ground for innovations prior to international roll‐out. Based on observation and key informant interviews with core members of the management team during a visit to Richmond Project in 1994, the case explores the initial phase of the introduction of a central production facility as an innovative route to pre‐eminence in one test market. Strategic and operational issues are discussed, highlighting the differences and efficiency gains of the central production facility cum satellite store approach compared to the traditional stand‐alone on‐site production approach. Implications for future developments are discussed.

Dunkin’ Donuts is a global retailer of coffee and bakery products. The company is 99 per cent franchised and has used the franchising system as a route to market entry and expansion worldwide. The original historic roots of the company are in the USA and despite wide international expansion since the 1970s, the US market continues to serve as a testing ground for innovations prior to international roll‐out. Based on observation and key informant interviews with core members of the management team during a visit to the Richmond project in 1994, the case explores the initial phase of the introduction of a central production facility as an innovative route to pre‐eminence in one test market. Strategic and operational issues are discussed, highlighting the differences and efficiency gains of the central production facility‐cum‐satellite store approach compared to the traditional stand‐alone on‐site production approach. Implications for future developments are discussed.

It is frequently assumed — if any thought is given to the matter — that the rules of English law apply throughout Great Britain with only minor variations so far as Scotland and Northern Ireland are concerned. Such an assumption, at least so far as Scotland is concerned, while understandable, is nonetheless incorrect; and it is one of which, I dare say, many an English property manager has been more or less rudely disabused depending on the degree of nationalistic pride felt by his company's Scottish solicitor.