Competition Markets Authority
Investigation update
16 August 2022: The CMA is positively engaging with firms who purchased freeholds from Taylor Wimpey in order to secure formal commitments from those freeholders to remove doubling clauses from their leases, and any doubling terms that were converted to be based on the Retail Price Index (RPI). This follows Taylor Wimpeys commitment to the CMA to help get such clauses removed at no cost to leaseholders. The CMA will provide an update in due course.
Regarding its investigation into alleged mis-selling by Barratt Homes, the CMA has now closed its case. Following careful scrutiny of the evidence gathered, the CMA concluded that it was insufficient to support a clear legal case for the CMA to secure collective redress for Barratt leaseholders under its consumer law powers. This was unlikely to change with further investigation and consequently continuing with the case would not be a good use of resources. Barratts sales practices have changed, and they no longer sell leasehold houses.
Undertakings accepted from 15 more freeholders
18 March 2022: 15 more freeholders have committed to make changes for the benefit of leaseholders. This follows similar commitments given by Countryside in September 2021.
The 15 new freeholders who had purchased Countryside freeholds have now given their commitment to remove clauses which caused the ground rents payable by leaseholders to double in price every ten or fifteen years. Where applicable, the freeholders will also remove terms which were originally doubling clauses but were converted into RPI-based ground rent terms and will repay homeowners who were affected by these doubling ground rent clauses. The ground rent for affected leaseholders will remain at the amount it was when the property was first sold and will not increase over time.
- Press release: Thousands more leaseholders freed from rising ground rents (18.3.22)
Freeholder Undertakings:
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The CMA is in ongoing discussions with 2 remaining freeholders with affected Countryside leases: D.A.T.S. (Holdings) Limited, who have agreed in principle to provide undertakings, and Wallace Estates Limited.
Undertakings accepted from Taylor Wimpey
22 December 2021: Taylor Wimpey has formally committed to make changes for the benefit of leaseholders. Taylor Wimpey will remove from leasehold contracts certain clauses which caused the ground rents payable by leaseholders to double in price every 10 years. It will also address lease terms which were originally doubling clauses but were converted into RPI-based ground rent terms. The ground rent for affected Taylor Wimpey leaseholders will remain at the amount it was when the property was first sold and will not increase over time.
Where Taylor Wimpey has sold the freehold, and cannot remove the doubling or RPI clauses itself, then it will help get them removed at no cost to leaseholders. This will involve liaising with the current freeholder and making a financial contribution where the freeholder gives formal commitments to the CMA to remove the clauses. Taylor Wimpey also confirmed that it has stopped selling properties with doubling ground rent clauses and will provide people with upfront information about the annual costs of buying a home.
- (22.12.21)
- Press release: CMA action frees leaseholders from costly contract terms (22.12.21)
Undertakings accepted from Countryside
15 September 2021: Countryside has formally committed to make changes for the benefit of leaseholders. Countryside will remove from leasehold contracts certain clauses which caused the ground rents payable by leaseholders to double in price every ten or fifteen years. It will also remove terms which were originally doubling clauses but were converted into RPI-based ground rent terms. The ground rent for affected Countryside leaseholders will remain at the amount it was when the property was first sold and will not increase over time.
Where Countryside has sold the freehold, and cannot remove the doubling clauses itself, then it will help get them removed at no cost to leaseholders. This will involve liaising with the current freeholder and making a financial contribution where the freeholder gives formal commitments to the CMA to remove the clauses. Countryside also confirmed that it has stopped selling properties with doubling ground rent clauses and has agreed to provide people with more upfront information about the annual costs of buying a home.
- (15.9.21)
- Press release: Leaseholders freed from costly contract terms (15.9.21)