Taylor Wimpey removes ground rent contract terms

A major housing developer has voluntarily given formal commitments to the Competition and Markets Authority to remove terms from leasehold contracts that cause ground rents to double in price.

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.

As part of this action, the CMA has already helped thousands of leaseholders by securing commitments from Countryside and Persimmon, as well as from an investor in freeholds, Aviva.

Due to the CMA’s action, affected Taylor Wimpey leaseholders will now see their ground rents remain at the original amount – i.e. when the property was first sold – and they will not increase over time. Taylor Wimpey has also confirmed to the CMA that it has stopped selling leasehold properties with doubling ground rent clauses.

Andrea Coscelli, CMA chief executive, said: “This is a huge step forward for leaseholders with Taylor Wimpey, who will no longer be subject to doubling ground rents. These are totally unwarranted obligations that lead to people being trapped in their homes, struggling to sell or obtain a mortgage.

“I hope the news they will no longer be bound into these terms will bring them some cheer as we head into Christmas.

“Other developers and freehold investors should now do the right thing for homeowners and remove these problematic clauses from their contracts. If they refuse, we stand ready to step in and take further action – through the courts if necessary.

Andrea continued: “Of the four developers against whom the CMA opened a case in September 2020 three have now settled with the CMA. Only the investigation into Barratt Developments is still ongoing.

As part of its review of the leasehold sector, the CMA is continuing to investigate two 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 is also continuing.

Looking to promote your product/service to SME businesses in your region? Find out how Bdaily can help →