Global Leasehold Models: A Look at UK's 990-Year Leases, Philippines' Push, and Singapore's Market

 

The concept of long-term real estate leasehold, where ownership doesn't transfer outright and rights either revert to the original owner or require renewal upon contract expiry, is a growing topic of discussion in Thailand.

 

Krungthep Turakij has examined international case studies, from the United Kingdom, with its deep history rooted in a feudal land ownership system, to neighbouring Vietnam.

 

 

 

United Kingdom

Property ownership in the UK primarily exists in two forms that can be confusing: "leasehold," a time-limited right to land, and "freehold," signifying outright ownership of both the property and the land it occupies.

 

Freehold denotes owning the building and the land it sits on. This is generally the preferred form of ownership as it offers complete control over the asset, free from the constraints of a lease agreement.

 

A freehold owner can modify, sell, or rent out their home without needing permission from the landowner or any third party.

 

The advantages of freehold ownership include absolute control over the property, no ground rent payments, and ease of sale, making it an attractive long-term investment.

 

In contrast, leasehold means owning a property for a set period but not the underlying land. The land remains the property of the freeholder.

 

Leasehold terms can vary significantly, ranging from 99 to 999 years. Once the lease expires, ownership reverts to the original freeholder unless the lease is renewed.

 

Leasehold has been a highly debated issue in the UK over the last decade. Campaigns started in 2017 with the publication of a report titled Homes Held Hostage: the rise and abuse of leasehold.

 

 

Following this, the Competition and Markets Authority (CMA) conducted an investigation, uncovering "alarming" evidence of homeowners being exploited.

 

Leaseholders reported paying excessive ground rents and service charges, and many buyers were not adequately informed that their property was leasehold or of the costs associated with extending their lease or purchasing the freehold.

 

Public criticism of leasehold intensified further following scandals related to external cladding on buildings. Many who had purchased leasehold flats faced huge costs and found themselves unable to sell their homes because the building owners (freeholders) refused to rectify unsafe cladding materials.

 

Currently, the UK has passed new leasehold and freehold reform laws, although they are not yet in force. Under this new legislation, leaseholders will benefit from simpler and, for some, cheaper processes to extend their leases and acquire their freeholds. The standard lease extension term will also be significantly increased to 990 years.

 

 

 

Philippines

The Federation of Filipino-Chinese Chambers of Commerce and Industry (FFCCCII) is actively lobbying the Philippine Congress to approve a bill allowing 99-year land leases.

 

They view this as a pivotal opportunity to transform the nation into a leading investment powerhouse in Asia.

 

In early June, Victor Y. Lim, President of the FFCCCII, articulated that such reforms would elevate the Philippines' standing on the global stage, attract vital foreign direct investment (FDI), and secure long-term economic prosperity.

 

The FFCCCII argues that the proposed bill is more than just a policy adjustment; it represents a strategic leap that will align the Philippines with Asia's rapidly evolving economic landscape.

 

 

The federation cited the success of other countries that have adopted long-term land leases, including Singapore (99 years), Malaysia (99 years), and Indonesia (95 years).

 

These nations have seen substantial growth across diverse sectors such as finance, technology, manufacturing, renewable energy, and agro-industry.

 

As an illustration, they pointed to Shenzhen, China, which transformed from a fishing village into a multi-trillion-dollar technology and tourism hub, with a consistent demand from investors for 99-year land leases.

 

 

 

Singapore

Within Singapore's highly competitive real estate market, there's an ongoing discussion about the relative merits of freehold versus leasehold properties.

 

While true freehold ownership, conferring outright title, is generally more sought after, purchasing a 99-year leasehold property comes with several notable advantages.

 

A 99-year leasehold property signifies that the land is leased from the government for that specified duration. Once the lease expires, the rights revert to the state unless the lease is renewed.

 

This type of property is typically found in newer developments or on land released through the Government Land Sales (GLS) programme.

 

The advantages of buying a 99-year leasehold property include:

Affordability: 99-year leasehold homes might be priced from 1.8million to 2.5 million Singapore dollars, whereas comparable freehold properties could cost between 3.5million and 3.9 million Singapore dollars.

Higher Rental Yields: Investors may find that leasehold properties offer better rental yields. As tenants often don't prioritise property ownership, rental income remains comparable to freehold properties, but the lower purchase price of leasehold homes results in a more favourable percentage return.

Opportunities for Foreign Ownership: It broadens the possibilities for foreign nationals to acquire property.

 

The most frequently cited disadvantage is depreciation as the lease term shortens. Property values often decline, particularly after the 70th year, and this depreciation can impact resale value and overall investment returns.

 

A report titled "Recent Market Trends: Leasehold Land Property Values Across Singapore Rise (2021-2025)" indicates a general decline in the number of sales transactions, from a peak of 813 in 2021 to a low of 101 in 2025.

 

This suggests a slowing trend in market activity, specifically for leasehold land properties. However, despite the decrease in volume, the average price per square foot (PSF) has consistently risen, from 987 Singapore dollars in 2021 to 1,453 Singapore dollars in 2025.

 

This indicates that even with fewer transactions, buyers are willing to pay more for leasehold land properties.

 

Overall average prices have, however, fluctuated, peaking in 2023 at 3,454,367 Singapore dollars before decreasing to 3,430,451 Singapore dollars in 2025.

 

This dynamic is influenced by both the number of transactions and the increasing average PSF.

 

 

 

Vietnam

Foreign nationals cannot purchase land in Vietnam directly, as all land is state-owned. However, they can obtain long-term leasehold rights for properties built on that land, such as houses or apartments within residential developments.

 

Typically, lease agreements are for a period of 50 years and can be renewed for an additional 50 years. There are quotas for foreign ownership, and proper supporting documentation is required. Total costs, including various taxes and fees, usually fall between 12-15% of the property's value.