Thousands more apartment and house leaseholders to get money back

The total number of homeowners that have benefitted from the Competition and Markets Authority’s (CMA) investigation into shady ground rent clauses has now totalled over 20,000 after nine companies that bought freeholds from house builder Taylor Wimpey agreed to remove the terms.

A further four national developers – Crest Nicholson, Redrow, Miller Homes and Vistry – have also agreed to work with the companies who purchased their freeholds to remove doubling terms.

The move will impact over 5,000 leaseholders throughout the UK, with many who paid a doubled rent receiving a refund.

The ground rent terms were deemed unfair as they can lead to people being trapped in homes they cannot sell or mortgage. The firms will also remove contract terms which were originally doubling clauses but were converted so the ground rent increased in line with the Retail Price Index (RPI).

UNFAIR

The CMA believes that the original doubling clauses were unfair and should therefore have been fully removed – not replaced with another term that still increases the rent.

All affected leaseholders will now see their ground rents remain at the original amount – when the property was first sold – and this will not increase over time.

Sarah Cardell (main picture), interim Chief Executive of the CMA, says: “For years leaseholders have been plagued by what we believe are unfair practices. That’s why we sought to tackle the problem by launching action against some of the biggest names in the business.”

Greg Clark (pictured), Secretary of State for Levelling Up, adds: “This is good news. Levelling up home ownership and creating a fairer, more transparent leasehold system is a top priority for this government.
“We will work with the CMA to continue challenging industry on its practices, so we can ensure more leaseholders get the fair deal they deserve.”

The CMA investigation is ongoing but now entering its final stages.