Leaseholders to “breathe a sigh of relief” following new CMA ruling
Leaseholders across the country may be able to contest doubling ground rents following a ‘landmark’ regulatory ruling.
The Competition and Markets Authority (CMA) has ruled that leaseholders with developer Countryside will no longer be subject to ground rents that double every 10 to 15 years.
Countryside Properties has voluntarily given formal commitments to the Competition and Markets Authority (CMA) to remove terms from leasehold contracts that cause ground rents to double in price.
It is expected that the ruling will set a new precedent for leaseholders of other developments across the country.
Andrea Coscelli, chief executive of the CMA, commented: “Leaseholders with Countryside can now breathe a sigh of relief knowing they will no longer be forced to pay these doubling ground rents.
“No one should feel like a prisoner in their home, trapped by terms that mean they can struggle to sell or mortgage their property. We will continue to robustly tackle developers and investors - as we have done over the past two years - to make sure that people aren’t taken advantage of.
“Other developers, such as Taylor Wimpey, and freehold investors now have the opportunity to do the right thing by their leaseholders and remove these problematic clauses from their contracts. If they refuse, we stand ready to step in and take further action - through the courts if necessary.
“This is the kind of issue that could be resolved at pace and met with fines if the CMA receives the consumer powers that the Government is currently consulting on.”
Housing Secretary Robert Jenrick added: “We asked the CMA to investigate the use of unfair practices in the housing market, such as doubling ground rents - and I welcome their continued success in bringing justice to homeowners.
“This settlement with Countryside will mean thousands more leaseholders are given the fair treatment they deserve and marks the third major agreement with leading UK developers and investors. I strongly urge others to follow suit and end these historic practices.
“We will continue to support leaseholders who may have been mis-sold properties and our new legislation will put an end to this practice for future homeowners, by restricting ground rents in new leases to zero.”
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