Leasehold

The CMA is investigating potential breaches of consumer protection law in the leasehold housing market.

Undertakings accepted from Countryside

15 September 2021: Countryside has formally committed to make changes for the benefit of leaseholders. Countryside will remove from leasehold contracts certain clauses which caused the ground rents payable by leaseholders to double in price every ten or fifteen years. It will also remove terms which were originally doubling clauses but were converted into RPI-based ground rent terms. The ground rent for affected Countryside leaseholders will remain at the amount it was when the property was first sold and will not increase over time.

Where Countryside has sold the freehold, and cannot remove the doubling clauses itself, then it will help get them removed at no cost to leaseholders. This will involve liaising with the current freeholder and making a financial contribution where the freeholder gives formal commitments to the CMA to remove the clauses. Countryside also confirmed that it has stopped selling properties with doubling ground rent clauses and has agreed to provide people with more upfront information about the annual costs of buying a home.

Undertakings accepted from Aviva and Persimmon; consultation letters issued to investment firms

23 June 2021: Aviva and Persimmon have formally committed to make changes for the benefit of leaseholders. Aviva will remove from leasehold contracts certain clauses which were doubling the ground rents payable by leaseholders. It will also remove terms which were originally doubling clauses and have been converted into RPI-based ground rent terms and repay homeowners who were affected by these doubling ground rent clauses.

Persimmon will offer leasehold house owners the option to buy the freehold of their property at a discount, better reflecting what they expected when they originally bought their house, and to make repayments to certain homeowners who have already purchased their freeholds. Persimmon has also agreed to extend the timeframe that prospective buyers are given to exchange contracts after reserving a property, and to provide people with more upfront information about the annual costs of buying a home.

The CMA has also written to investment groups, Brigante Properties, and Abacus Land and Adriatic Land, setting out its concerns and requiring them to remove doubling ground rent terms from their contracts. These investment groups now have the opportunity to respond to the CMA’s detailed concerns.

Consultation letters – Countryside Properties and Taylor Wimpey

19 March 2021: The CMA has issued consultation letters to two housing developers in relation to possible breaches of consumer protection law in the residential leasehold sector. These letters outline the CMA’s specific concerns about the potential unfairness of terms that double ground rent every 10 or 15 years and ask the developers to take steps to address these. Countryside Properties and Taylor Wimpey now have an opportunity to respond to the CMA’s detailed concerns.

Case opening

04 September 2020: The CMA has now opened cases in relation to possible breaches of consumer protection law in the residential leasehold sector. The CMA is concerned about possible instances of mis-selling and potential unfairness of certain leasehold contract terms. The CMA will now engage with relevant businesses to conduct further information gathering and seek to resolve these concerns.

In addition to this action, the CMA has also published some short videos and guides for consumers who may own or be buying a leasehold property:

Investigation update

28 February 2020: Today we published an update on our investigation. The update outlines our current thinking into whether there have been breaches of consumer protection law in the residential leasehold housing sector and next steps, including future enforcement action by the CMA and the need for legislative change.

Investigation launch

11 June 2019: The Competition and Markets Authority opened an investigation into the leasehold housing market. We will shortly be writing to a range of market participants to ask for information. The CMA is concerned about potential leasehold mis-selling, and whether leasehold contract terms are onerous and unfair in relation to ground rent, permission and other charges.

At this early stage, the CMA has not reached a view whether or not any person or company has broken consumer protection law.

Call for your views: now closed

If you wish to provide information to the CMA please use one or more of the following email addresses below:

In the heading of your email please indicate the address of the property about which you are getting in touch with the CMA and any other relevant material such as, should you be contacting us to make a complaint, the person against whom you wish to complain.

In your email please provide as much detail as you are comfortable with including timescales and dates, values and frequency of payments etc.

We would appreciate initial responses by 12 July.

Contacts

leasehold@cma.gov.uk

Director

Simon Jones

Published 11 June 2019
Last updated 15 September 2021 + show all updates
  1. Undertakings published.

  2. Undertakings accepted from Aviva and Persimmon; consultation letters issued to investment firms.

  3. The CMA has issued consultation letters to Countryside Properties and Taylor Wimpey. These are now published on the page.

  4. Opening case statement published.

  5. Project update report published.

  6. First published.