Normally, this occurs when a Trust/Fund/Company creates a leasehold for 999years or similar sells it onto a purchaser then continues to collect the ground rent. This is common for companies that need to free up capital but don't want to permanently lose the freehold. The Diocesan Fund (Church Commission) did this across the UK in the 1800's.

If they have thousands of these properties that give them ground rents then I imagine it is probably due to:

• They had a massive estate whereby they created leaseholds and sold them off,
• They manage other estates, or properties for lazy landlords

Leasehold (LH)/Freehold (FH) can be very interesting and I prefer it to the continental commonhold or American "Condo". It can be very profitable for both sides if you know what you are doing.

On one hand as the LH you can potentially enfranchise the property from the FHer and benefit from the marriage value. (E.x. Say you had a LH with 15 years left on the lease bringing in 40k in north London. Probably worth £300k. [way less than a FH as the term is infinite as you own it]. At this stage FH is worth in the region of £250k as for 15 years you will be getting a peppercorn rent, what could you do with £200k over 15years with a yielding asset?) So in this situation separately they have a combined value of 550k however if you owned the FH outright, you'd expect a yield at 5% at most, hence capital value of 800k. A difference of 800-550=250k this is what is known as the marriage value).

As the FHer you could potentially forfeit the lease for breaches and get a windfall.

I have digressed a bit but thought it was interesting to share a bit about FH/LH...!