housands more homeowners who paid a doubled ground rent on their property will receive a refund after the competition watchdog cracked down on “unfair” leasehold practices.
More than 5,000 households in the UK will be compensated after being caught in contracts that saw their ground rents double in price every 10 years.
Many of these homeowners became trapped in homes that they could not sell or mortgage as a result of the costly terms, the Competition and Markets Authority (CMA) said.
For years leaseholders have been plagued by what we believe are unfair practices
The CMA previously investigated housing giant Taylor Wimpey which agreed to scrap the terms that were causing ground rents to double in December.
And following further investigations, nine more companies that had bought freeholds from Taylor Wimpey have committed to axing the problematic doubling terms, the CMA announced on Wednesday.
A further four national developers – Crest Nicholson, Redrow, Miller Homes and Vistry – have agreed to work with the companies who purchased their freeholds to remove the unfair clauses.
It means 20,000 total homeowners will be compensated or see their ground rents remain at the original amount as a result of the investigation, which first began in 2019.
Sarah Cardell, interim chief executive of the CMA, said: “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.
“As a result of our work, over 20,000 people now have a new lease of life, freed from issues like costly doubling ground rent terms.”
Earlier in August, the watchdog was forced to drop its investigation into alleged mis-selling by housebuilder Barratt Homes after it found “insufficient” evidence to take legal action.
It urged people who feel they are victims of mis-selling to seek individual action instead.
The CMA said the wider leasehold investigation was moving into its final stages as it works with remaining firms that bought freeholds from Taylor Wimpey.
Greg Clark, the Secretary of State for Levelling Up, said: “This is good news that will see thousands of leaseholders get the refunds they are entitled to.
“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.”