Thousands more homeowners who paid a doubled ground rent on their property will get a refund after the competition watchdog cracked down on “unfair” leasehold practices.
More than 5,000 households in the UK will be compensated after being caught in contracts in which their ground rents doubled every 10 years.
Many of these homeowners became trapped in properties they could not sell or mortgage because of the costly terms, the Competition and Markets Authority (CMA) said.
The CMA previously investigated the big housing company Taylor Wimpey, which agreed in December to scrap the terms under which ground rents doubled..
Now, after further investigation, nine more companies that had bought freeholds from Taylor Wimpey have committed to axing the practice of doubling terms, the CMA announced on Wednesday.
A further four national developers – Crest Nicholson, Redrow, Miller Homes and Vistry – have agreed to work with the companies that bought their freeholds to remove the unfair clauses.
As a result of the investigation, which began in 2019, about 20,000 homeowners in total will be compensated, or their ground rents will remain at the original amount.
Sarah Cardell, the interim chief executive of the CMA, said: “For years leaseholders have been plagued by what we believe are unfair practices. That’s why we sought to tackle the problem by launching action against some of the biggest names in the business. As a result of our work, over 20,000 people now have a new lease of life, freed from issues like costly doubling ground rent terms.”
Earlier this month, the watchdog was forced to drop its investigation into alleged mis-selling by the housebuilder Barratt Homes after it found there was “insufficient” evidence to take legal action. It urged people who felt they were victims of mis-selling to take individual action instead.
The CMA said the wider leasehold investigation was moving into its final stages as it worked with the remaining firms that bought freeholds from Taylor Wimpey.
Greg Clark, the secretary of state for levelling up, said: “This is good news that will see thousands of leaseholders get the refunds they are entitled to. We will work with the CMA to continue challenging industry on its practices, so we can ensure more leaseholders get the fair deal they deserve.”