This article is from the source 'bbc' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.
You can find the current article at its original source at https://www.bbc.co.uk/news/business-58569020
The article has changed 8 times. There is an RSS feed of changes available.
| Version 0 | Version 1 |
|---|---|
| Countryside scraps leasehold ground rent rises | Countryside scraps leasehold ground rent rises |
| (about 1 hour later) | |
| Thousands of leaseholders who bought homes from a major housebuilder will no longer be subjected to ground rents that double every 10 or 15 years. | |
| Countryside Properties agreed to remove contract terms that cause ground rents to double in price, after a probe by the Competition and Markets Authority. | Countryside Properties agreed to remove contract terms that cause ground rents to double in price, after a probe by the Competition and Markets Authority. |
| It means affected leaseholders' ground rents will remain at the amount charged when they first bought their homes. | It means affected leaseholders' ground rents will remain at the amount charged when they first bought their homes. |
| The watchdog said leaseholders could breathe a "sigh of relief". | The watchdog said leaseholders could breathe a "sigh of relief". |
| Andrea Coscelli, chief executive of the CMA, said: "No one should feel like a prisoner in their home, trapped by terms that mean they can struggle to sell or mortgage their property. | Andrea Coscelli, chief executive of the CMA, said: "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." | "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." |
| Countryside Properties also confirmed it no longer sells leasehold homes with doubling ground rents. It will also remove terms which converted clauses which meant ground rent increased in line with the Retail Prices Index (RPI). | |
| The effect of rises in ground rents, which kick in every 10 to 15 years, can lead to people struggling to sell or mortgage their homes. Their property rights can also be at risk if, for example, they fall behind on their rent. | |
| The commitment from Countryside comes after the CMA launched enforcement action against four housing developers in September 2020. | The commitment from Countryside comes after the CMA launched enforcement action against four housing developers in September 2020. |
| In June, housebuilder Persimmon agreed for its leaseholders to buy the freehold of their property at a discount. Aviva, which buys leaseholds from house builders, also pledged to repay homeowners who saw their ground rents double. | |
| The regulator launched its investigation into leaseholds in 2019 because it was worried that leaseholders were facing huge and unexpected increases in the cost of buying a freehold or massive increases in ground rents. | The regulator launched its investigation into leaseholds in 2019 because it was worried that leaseholders were facing huge and unexpected increases in the cost of buying a freehold or massive increases in ground rents. |
| What is a leasehold? | |
| With a leasehold, the person owns a lease which gives them the right to use the property. But they still have to get their landlord's permission for any work or changes to their homes. | |
| When a leasehold flat or house is first sold, a lease is granted for a fixed period of time, typically between 99 and 125 years, but sometimes up to 999 years - although people may extend their lease or buy the freehold. | |
| But leasehold house owners are often charged expensive ground rent as well as fees if they want to make changes to their homes. A leasehold house can also be difficult to sell. | |
| As part of its review of the leasehold sector, the CMA is investigating investment groups Brigante Properties, Abacus Land and Adriatic Land. Its investigation into Barratt Developments and Taylor Wimpey is also continuing. | |
| Ms Coscelli said Taylor Wimpey and freehold investors had the "opportunity to do the right thing" to remove "problematic clauses from their contracts". | |
| "If they refuse, we stand ready to step in and take further action - through the courts, if necessary," she said. | |
| Housing secretary Robert Jenrick said the agreement with Countryside would mean thousands of leaseholders would be "given the fair treatment they deserve". | |
| He said new legislation would "put an end to this practice" by housebuilders for future homeowners, by setting ground rents in new leases at zero. |