UK's Countryside drops rent doubling clauses after settlement

(Reuters) -UK's Countryside Properties will drop contract terms that lock leaseholders into rents that double every 10 or 15 years, it said on Wednesday, ending a year-long probe into the housebuilder by a British regulator.

The company said it would set aside 5 million pounds ($6.9 million), in addition to a 10-million-pound previous provision to repay affected customers as part of a ground rent assistance scheme. Ground rent is a fee paid by leaseholders to cover the land a home sits on.

Britain's Competition and Markets Authority (CMA) launched an investigation last September, filing cases against property developers Barratt, Taylor Wimpey and Persimmon besides Countryside.

"This settlement with Countryside will mean thousands more leaseholders are given the fair treatment they deserve," British housing secretary Robert Jenrick said in a statement from the CMA. "I strongly urge others to follow suit and end these historic practices."

The agreement, which will help Countryside avoid potential court action, includes dropping the 10- and 15-year clauses at no cost to leaseholders, except in leases where the beneficiary is a local authority or a registered provider of social housing.

In March, peer Taylor Wimpey said it was cooperating with the regulator after it was asked to drop unfair ground rent terms from contracts, while in June, Persimmon and a fund managed by Aviva in June too agreed to drop similar terms.

($1 = 0.7236 pounds)

(Reporting by Aby Jose Koilparambil in Bengaluru; editing by Uttaresh.V)