The Global Rentier Economy is now on steroids.
Imagine buying a house with a 30-year mortgage only to discover months later that you have to pay rent on the ground upon which it is built. That rent can go up just about as high and as fast as the real owner wants it to. Plus, if you want to make any structural changes to the building you’ve bought but don’t own, you must first seek permission from the owner; if he or she concurs, you then must pay a hefty fee.
Absurd as this arrangement may sound, it is surprisingly common in the United Kingdom today. Banished from most advanced economies, including those with English common law like Australia, North America, or even Scotland, this archaic leasehold arrangement has in recent years wiped out the equity of thousands of people who mistakenly thought they were buying their own home.
When a house is purchased as a leasehold, the buyer, knowingly or not, is really no more than a tenant, albeit one with a tenancy agreement that typically lasts for up to a century. The freehold — the building as well as the land the property occupies — belongs to somebody else, usually the builder that sold the property, or an investment firm…