Competition regulator says Crest, Miller, Redrow and Vistry have all agreed to help customers over ‘doubling’ ground rent homes
Crest Nicholson, Miller Homes, Redrow and Vistry have been collared by the competition regulator over the sale of homes with “doubling” ground rent clauses and have agreed to try to sort out the problems for customers.
The Competition and Markets Authority (CMA) said in a statement that the four housebuilders had agreed to work with the companies who had subsequently bought the freeholds from the housebuilders in order to remove the offending ground rent clauses.
This latest action in the CMA’s two-year investigation into the leasehold selling scandal in the housebuilding industry came as the regulator said it had also reached agreement with nine further freehold landlords who bought “doubling” freeholds from Taylor Wimpey which will see over 5,000 UK households refunded.
The news comes just a week after the CMA dropped its investigation into Barratt for mis-selling leasehold houses. The regulator has already made Taylor Wimpey, Countryside and Persimmon make formal undertakings to change their practices and deliver redress to their customers following parallel investigations into their practices.
The CMA today said that the deals with Crest, Miller, Redrow and Vistry meant the four were now cooperating with the CMA by working with freeholders to remove doubling clauses from their leases.
The scandal saw a series of housebuilders sell homes on a leasehold basis with ground rent clauses in their leasehold contracts that doubled over certain periods, making them unaffordable in the long term, and rendering homes unsellable when the implications of the contracts were realised.
The nine leasehold landlords who have today settled with the CMA have provided undertakings meaning they must now remove problematic contract terms that cause ground rents to double in price every 10 years, as well as remove contract terms which were originally doubling clauses, but were later converted so the ground rent increased in line with the Retail Price Index (RPI). People who paid a doubled rent will receive a refund.
The CMA said its investigation had now helped over 20,000 homeowners, but that a number of purchasers of Taylor Wimpey freeholds were yet to provide undertakings to refund customers.
Sarah Cardell, interim chief executive of the CMA, said: “For years leaseholders have been plagued by what we believe are unfair practices. As a result of our work, over 20,000 people now have a new lease of life.”
The nine leasehold companies to have settled are: BDP Freehold Limited; Mortgage Incentive Funds Limited; The Bridges (Darlington) Management Company Limited; Bessant Properties Limited; Brigante Properties Limited; Furatto Limited and Long Term Reversions No 1 Limited; SF Ground Rents No 18 Limited, SF Ground Rents No 15 Limited and RMB 102 Limited; Sarum Properties Limited; and Taylor Court Limited
The leasehold landlords still to come to an agreement with the CMA are: Island Apartments Freehold Limited; Madison Close Freeholders Limited; Elmdon Real Estate LLP; Abacus Land 1 (Holdco 1) Limited, Abacus Land 4 Limited and Adriatic Land 1 (GR3) Limited (part of the Abacus Land and Adriatic Land investment group); and Plaza 2 Surbiton Limited
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