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UK property: Regulator cracks down on mis-selling of leaseholds

Tom Belger
Finance and policy reporter
A clampdown has been announced on developers over fees and other issues with leasehold flats. (PA)

A regulator has announced a clampdown on developers over “troubling evidence” of mis-selling in the sale of leasehold properties in the UK.

The Competition and Markets Authority (CMA) said on Friday it would take “direct enforcement action” against firms it believes have broken consumer protection law.

The watchdog has been investigating issues in the leasehold property market since last June.

It said it had identified a range of concerns from its probe so far, including that leasehold homeowners have been “unfairly treated” and potential buyers “misled” by developers.

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Concerns highlighted include:

  • The rising cost of ground rents levied on homeowners, with some found to double every 10 years. Some struggle to sell their homes, leaving them “trapped.”

  • Buyers not being told upfront that properties are leasehold, meaning the buyer has the right to the property for a certain period but does not own the land it sits on.

  • Homeowners being charged “excessive and disproportionate fees” for services like standard maintenance of shared spaces in blocks or home improvements.

  • People being misled about the cost of converting leasehold properties into freehold ownership before buying.

Andrea Coscelli, the CMA's chief executive, said: "Buying a home is one of the most important and expensive investments you can make, and once you're living there you want to feel secure and happy. But for thousands of leasehold homeowners, this is not the case.”

The CMA said its evidence supported the case for changes in the law. It is helping working with the wider government on plans to ban the sale of new leasehold houses and cut ground rents on leases to zero.

It said enforcement action could see firms made to sign legal commitments to change how they operate. Failure to comply could see them taken to court.

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Jackie Bennett, director of mortgages at UK Finance, said the investigation sent a “clear signal” that leaseholders should be treated fairly and terms communicated transparently.

She said it was “good” the CMA planned action on unfair cases, but defended the principle of offering properties leasehold.

"Leasehold is an appropriate tenure in the right circumstances, for example where properties have shared services or are built on land with specific restrictions,” she said

If you have been affected by any of the issues highlighted and want to share your story, get in touch at

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