Following CMA action, leaseholders with Countryside Properties will no longer be subjected to ground rents that double every 10 or 15 years
Following CMA action, leaseholders with Countryside Properties will no longer be subjected to ground rents that double every 10 or 15 years.
Countryside Properties – one of the UK’s leading housing developers – has voluntarily given formal commitments to the Competition and Markets Authority (CMA) to remove terms from leasehold contracts that cause ground rents to double in price. The effect of these increases, which kick in every 10 to 15 years, is that people often struggle to sell or mortgage their home and their property rights can be at risk, for example, if they fall behind on their rent.
Countryside will also remove terms which were originally doubling clauses but were converted so that the ground rent increased in line with the Retail Prices Index (RPI). The CMA believes the original terms were potentially unfair and should therefore have been fully removed, instead of being replaced with another term that still increases the ground rent.
The move comes after the CMA launched enforcement action against 4 housing developers in September 2020. These were Countryside and Taylor Wimpey, for using possibly unfair contract terms, and Barratt Developments and Persimmon Homes over the possible mis-selling of leasehold homes. The CMA has already secured commitments from Persimmon and Aviva as part of this action, helping thousands of leaseholders.
Due to the CMA’s action, affected Countryside leaseholders will now see their ground rents remain at the original amount – i.e. when the property was first sold – and this will not increase over time. Countryside also confirmed to the CMA that it has stopped selling leasehold properties with doubling ground rent clauses.
Andrea Coscelli, Chief Executive of the CMA, said:
Housing Secretary Robert Jenrick said:
As part of its review of the leasehold sector, the CMA is continuing to investigate investment groups Brigante Properties, and Abacus Land and Adriatic Land, after it wrote to the firms earlier this year setting out its concerns and requiring them to remove doubling ground rent terms from their contracts. The CMA’s investigation into Barratt Developments and Taylor Wimpey is also ongoing.
For more information on the CMA’s ongoing work in the sector and for future updates, please visit the leasehold case page.
Notes to Editors