The Competition and Markets Authority (CMA) has launched an investigation into four leading housing developers – Barratt Developments, Countryside Properties, Persimmon Homes and Taylor Wimpey – as it believes they may have broken consumer protection law in relation to leasehold homes.
The CMA said that it found “troubling evidence of potentially unfair terms concerning ground rents in leasehold contracts and potential mis-selling”.
Consumers could have been mis-sold homes through a combination of unclear information about ground rents, misinformation about the availability and cost of the freehold and the use of unfair sales tactics according to the CMA.
They may also be trapped in their homes by unfair contract terms relating to ground rent. For example, some consumers are having to pay ground rent that doubles every 10 years, which means costs are escalating out of control and they’re unable to sell their homes.
The CMA said that depending on the outcome of their investigation, they could compel the named companies to change their practices by law or take them to court – but at this stage the companies are just under investigation.
But changes could be on the way, and there could be more protection for those looking to buy leasehold homes.