Aristocratic landowners with connections to the family of former prime minister David Cameron, mysterious Dublin-based shell companies that pay no tax, and groups based in the Channel Islands are among the freehold owners that appear to have made millions from spiralling ground rents.

When Guardian Money attempted to trace the ultimate ownership of the five-bed detached home bought by Jo Darbyshire in Bolton, we uncovered the pass-the-parcel world of freehold speculation.

Quick guide Leasehold houses and ground rent Show Hide What are leasehold houses? Britain has had leasehold homes for hundreds of years, but only in the past few months has the ground rent scandal exploded. Now the government is proposing a complete ban on new houses sold as leasehold, and reducing ground rents to zero. Traditionally, houses have been sold as freehold, and the buyer has complete control over their property. When a house is sold as leasehold, the buyer is effectively only a tenant with a very long term rental, with the ground the home is built on remaining in the hands of the freeholder. The home buyer has to pay an annual “ground rent” to the freeholder, and has to ask the freeholder for consent if they want to make any changes to the property, such as building a conservatory or changing the windows. Why have they suddenly become such a problem? In the past, leasehold property owners were generally charged just a “peppercorn” ground rent, sometimes as little as £1 a year, and many freeholders did not bother to collect it. But the picture changed earlier this century, when developers started to insert clauses into leasehold contracts where the ground rent was set at £200-£400 a year, doubling every ten years. Direct Line estimates the typical ground rent to be currently £371. Although unsuspecting first-time buyers were frequently told that 999-year leases were “virtually freehold”, the clauses meant that the ground rent would soon spiral to absurd levels. The government quotes a family house where the ground rent is expected to hit £10,000 a year by 2060.

How many people are affected? The Leasehold Knowledge Partnership, which has vigorously campaigned on this issue, estimates that around 100,000 homebuyers are trapped in contracts with spiralling ground rents. There are many more people in leasehold flats, some of which also have doubling ground rents. Is it just the ground rent that is the issue? No. Freeholders are able to extract other sums out of their leaseholders in a variety of ways. Homebuyers report being charged £100 even to have a letter answered by the freeholder, and as much as £2,500 for permission to build a conservatory. These are charges that are on top of obtaining planning permission.

Darbyshire, 46, and her husband Mark, 47, bought their home from Taylor Wimpey in 2010, and are among thousands of leaseholders on “doubling” ground rent contracts, meaning the sum paid doubles every 10 years.

Two years after the Darbyshires completed their purchase, Taylor Wimpey sold their freehold to a company called Adriatic Land 2 (GR2). It is not known how much Taylor Wimpey earned from the deal.

In January 2017, that freehold ownership was transferred to Adriatic Land 1 (GR3), while some of Darbyshire’s neighbours have seen their freeholds transferred from Adriatic Land 2 (GR2) to Abacus Land Ltd. “You have no idea who owns the land under your feet,” said Darbyshire. “Your dream house is traded from one offshore company to another for tax reasons, or who knows what else?”

Victims of ground rent scandal demand action on existing abuses Read more

Adriatic Land 1 (GR3) is registered at Companies House with an address at Palmer Street in the heart of Westminster, London. The documents show that one of its directors until late 2013 was “the Honourable William Waldorf Astor”, the half- brother of David Cameron’s wife, Samantha.

Astor runs the fund manager Long Harbour, which invests in residential freeholds, and is also director of HomeGround, which administers freeholds on behalf of various landlords, including the Adriatic Land vehicles.

The website for the Long Harbour ground rent fund boasts: “Since closing our first transaction in 2010, Long Harbour has acquired over 160,000 residential units comprising approximately £1.4bn of assets to date.” It says many of the investors in its fund are pension groups looking for a secure long-term income.

A Long Harbour spokesman said it met all of its tax obligations, adding that investors in its unit trusts and limited partnerships “are responsible for payment of any of their own taxes”.

He added: “The investment funds in the Long Harbour ground rent fund are UK-based pension and life assurance funds seeking a long-term inflation-proof income and as such are tax exempt.”

Since 2013, Darbyshire’s freeholder, Adriatic Land 1 (GR3), has listed its directors as individuals based in Dublin, and says its ultimate controlling party is Jetty Finance DAC, registered in Dublin. Its last reported accounts show the company had £19m in property assets and earned an income of £1.9m, on which it made a profit of £1.3m. In the year to March 2016 it paid zero corporation tax; there is no suggestion of any wrongdoing.

There are numerous other Adriatic Land companies registered at Companies House. Adriatic Land 4 (GR1), for example, has interests in £27m worth of property, with its immediate parent company listed in Guernsey in the Channel Islands.

Leasehold houses and the ground rent scandal: all you need to know Read more

E&J Estates is another major buyer of freeholds from developers. Lindsay Lloyd in Ellesmere Port, Cheshire, bought her three-bed semi from Taylor Wimpey in 2009, but as a 22-year-old with little spare cash – and told by her solicitor that the ground rent would not be a burden – decided against paying £2,625 for the freehold.

A few years later the 999-year freehold was sold to E&J. When she approached the company to buy her freehold, she was initially rebuffed. After pressing for a quote, she says she was asked for £32,000. “I just thought they were having a laugh. The property only cost us £155,000.”

Lloyd, who works in a creche, said she was unable to afford the £32,000. Meanwhile, her ground rent doubled from £175 a year to £350 a year on 1 July, despite promises by the developer, Taylor Wimpey, to help out buyers with a £130m assistance scheme.