The UK Leasehold System is Unique in the World
England and Wales are almost entirely unique globally in their use of the residential leasehold system. The rest of the world uses strata titles or condominium ownership.
If you buy a flat in New York, Paris, or Sydney, you permanently own a slice of the building via a condominium or strata title system. If you buy a flat in London, you don't actually own it forever. You simply buy a long-term rental agreement (a leasehold) that eventually expires and returns ownership to the freeholder.
A Feudal Relic
The English residential leasehold system is a relic of medieval feudalism, designed to allow wealthy landowners to develop their estates without ever actually selling the land. England and Wales are almost the only jurisdictions in the world that still use this system for residential flats. Even Scotland abolished residential leaseholds in 2004.
The system has led to widespread abuse, with developers selling houses as leasehold (rather than freehold) and inserting aggressive doubling ground rent clauses. While the government passed the Leasehold Reform (Ground Rent) Act 2022 to ban ground rents on new leases, the fundamental structure of buying a depreciating asset rather than permanent ownership remains a uniquely English legal anomaly.