UK markets open in 3 hours 25 minutes
  • NIKKEI 225

    27,603.57
    -38.26 (-0.14%)
     
  • HANG SENG

    26,607.60
    +412.78 (+1.58%)
     
  • CRUDE OIL

    70.49
    -0.07 (-0.10%)
     
  • GOLD FUTURES

    1,817.70
    +3.60 (+0.20%)
     
  • DOW

    35,116.40
    +278.24 (+0.80%)
     
  • BTC-GBP

    27,315.81
    -705.46 (-2.52%)
     
  • CMC Crypto 200

    929.88
    -13.56 (-1.44%)
     
  • ^IXIC

    14,761.29
    +80.23 (+0.55%)
     
  • ^FTAS

    4,074.79
    +13.67 (+0.34%)
     

Watchdog forces action on leaseholds

·2-min read
Housebuilder
Housebuilder

Investor Aviva and housebuilder Persimmon Homes have agreed to "landmark" commitments on leaseholds as part of the UK competition watchdog's investigation into unfair practices in the sector.

The Competition and Markets Authority (CMA) said Aviva - which invested in freeholds from developers - has agreed to remove ground rent terms considered unfair and repay homeowners who saw rents doubled.

Persimmon has also agreed to offer leasehold home owners the opportunity to buy the freehold of their property at a discounted price.

The CMA said the "landmark commitments" would benefit thousands of leaseholders.

The CMA - which launched enforcement action against four housing developers last September - warned the wider sector to review its practices and said it had written to three more investors in freeholds calling for them to remove doubling ground rent terms from their contracts.

Andrea Coscelli, chief executive of the CMA, said: "This is a real win for thousands of leaseholders - for too long people have found themselves trapped in homes they can struggle to sell or been faced with unexpectedly high prices to buy their freehold.

Watch: Am I wasting my money by renting?

"Now, they can breathe a sigh of relief knowing things are set to change for the better.

"It's good that Aviva and Persimmon have responded positively to this investigation, enabling these issues to be fixed for leaseholders.

"But our work isn't done. We now expect other housing developers and investors to follow the lead of Aviva and Persimmon. If not, they can expect to face legal action."

Dean Finch, group chief executive at Persimmon, said: "Persimmon has not historically sold leasehold houses in high volumes and introduced a right to buy scheme for leaseholders in 2017.

"However, we are committed to putting our customers first and have voluntarily agreed to extend this existing support to provide further certainty and reassurance.

"Building on our existing right to buy scheme, this agreement provides a fair deal for all leaseholders of Persimmon-built houses, extending the opportunity to purchase their freehold at a price well below market value."

Watch: How much money do I need to buy a house?

Our goal is to create a safe and engaging place for users to connect over interests and passions. In order to improve our community experience, we are temporarily suspending article commenting