Investment firms drop punitive land rent hikes after CMA action

Fifteen housing associations and investment firms have agreed to scrap costly land rent increases after action by the Competition and Markets Authority.

This action protects 3,400 tenants, whose ground rent will now remain at the amount charged when their home is first sold, instead of doubling every 10 or 15 years.

The fifteen companies purchased these properties freeholds from property developer Countryside. The AMC said it would continue to put other property developers “under the microscope” as it continues to investigate the matter.

These fifteen companies agreed to remove conditions that caused the price of ground rent to double after a specified period of time. These increases mean that tenants may find it difficult to sell or obtain a mortgage on these properties. Their property rights can also be threatened if they fall behind on this land rent.

This latest action by the CMA comes after it secured a commitment from Countryside in September last year to remove the conditions. At the same time, he also launched legal action against four property developers: Countryside and Taylor Wimpey for using potentially abusive contract terms, and Barratt Developments and Persimmon Homes for the possible abusive sale of leasehold accommodation.

The CMA said that after obtaining a commitment from Countryside to remove the terms of doubling land rents from its contracts, it then investigated the companies that bought these freehold properties and continued to use the same terms at the expense. tenants.

As part of this ongoing review, the AMC continues to investigate two investment groups: Brigante Properties and Abacus Land and Adriatic Land. The two have agreed to remove terms from leases bought from Countryside, but the CMA is asking for similar action on leases bought from Taylor Wimpey.

Leveling Secretary of State Michael Gove said the government had asked the AMC to investigate unfair practices in the lease system.

“I salute their continued success in eradicating this unacceptable treatment of leaseholders from the housing market and freeing thousands from these inflated costs. Others must now follow suit, as our work to help all tenants continues.

He said the CMA’s action is helping chart the course for a more equal future for homeownership.