The CMA has secured undertakings from nine companies that bought freeholds from leading housing developer Taylor Wimpey. A further four national developers – Crest Nicholson, Redrow, Miller Homes and Vistry – have also agreed to work with the companies that purchased their freeholds to remove doubling terms. The move will impact over 5,000 households throughout the UK, with many that paid a doubled rent receiving a refund.
All nine firms must now remove problematic contract terms that cause ground rents to double in price every 10 years. These terms can lead to people being trapped in homes they cannot sell or mortgage. The firms will also remove contract terms that were originally doubling clauses, but were converted so the ground rent increased in line with the Retail Price Index (RPI). 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.
This action brings the total number of home owners that have benefited from the CMA’s investigation to over 20,000.
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. The nine freeholders have also agreed to refund residential leaseholders who had already paid out under doubled ground rent terms.
Secretary of State for Levelling Up Greg Clark said this will see thousands of leaseholders get the refunds they are entitled to.
“Levelling up home ownership and creating a fairer, more transparent leasehold system is a top priority for this government, and these agreements are an example of this in action,” he said.
Since 2019, the CMA has sought to tackle issues around the possible mis-selling of leasehold homes and contract terms it believes are unfair. Its investigations involving seven leading housing developers – and businesses that purchased freeholds from these firms – have led to landmark changes.
As the investigation moves into the final stages, the CMA is engaging with additional firms, including the Abacus Land and Adriatic Land investment group, which bought freeholds from Taylor Wimpey.
