Why are people freeholders? What's the point?

[Racquelscottish]

Why are so many flats (converted from houses) leasehold, and what does the freeholder get out of being the freeholder? Surely just a lot of hassle and almost no money for it really?

I can understand in a big block with grounds, lots of communal areas etc a freeholder is necessary, but why on earth don't lots of freeholders just surrender the freehold to the leaseholders?

They get to charge a large admin fee for consents. They get a kickback on insurance premiums. They get to charge a load every time the lease needs extending (although this last one is changing soon). So freeholds are are an investment. At some point that 90 year lease is going to need extending... and actually
leaseholders can club together and buy out the freehold - there is a statutory mechanism for it.

what does the freeholder get out of being the freeholder?
Er, ground rent? You might as well ask what does a shareholder get (dividends) or a deposit-holder (interest).

They are parasites.

Because it's a license to print money currently but hopefully just about to change!
When I was moving, my freeholder tried to charge me £400 permission for a wall which had been removed years before I had even moved into the property and then another £380 to inspect it after!
I just got an indemnity policy instead for £70.
Also they can charge what they like for service charges. The law suggests they can't do that but it's a different story when you try and hold them accountable!

I had to pay my lease holder £20,000 to purchase or extend my lease when we owned our flat... they did nothing! No maintenance, no insurance as we did that ourselves.
Only did it so we could sell it on as the lease years had got too low! Awful awful practice and I would never by leasehold again!

Our freeholder is absentee since mid 1990s, presumed dead. Didn’t stop me having to pay him £10000 into the court, to extend my lease. Farcical.

It’s a system which a lot of people feed off: surveyors, solicitors etc as well as the freeholders.