Leasehold Reform: House Developers try to make amends
The term ‘Leasehold’ has become tarnished in recent years due to numerous practices which have left home-owners out of pocket and without hope.
If you read our previous blog on this topic, you will note that the Law Commission have carried out a consultation on reforms to leasehold law, and the Government’s Housing Secretary is trying to implement measures to make the market fairer.
The Competition and Markets Authority (CMA) are another branch who have been investigating the fairness of leasehold sales in recent years, including reviewing the practices of house developers who sold large numbers of leasehold houses with doubling ground rent provisions. The CMA has stated that their investigations have found troubling evidence of potential mis-selling and unfair contract terms in the leasehold housing sector, and they are set to launch enforcement action.
Borne out of the investigation, and the CMA having raised enforcement action, Persimmon Homes have recently announced that they have agreed with the CMA to:
- Offer the sale of freehold of a leasehold house at a discounted price (£2,000)
- Offer refunds for those who have already purchased the freehold, for the difference between the price paid and £2,000
- Extend the time for homeowners to buy the freehold until 31 December 2026
Similarly, Taylor Wimpey have previously introduced a scheme to help qualifying customers who purchased their leasehold homes with 10 year doubling ground rents, to convert their ground rent terms to an RPI based structure.
It is left to be seen how many other house builders will follow suit and introduce measures to ease the burden of owning a leasehold house.
If you have purchased a leasehold house and would like more information on the above, please email or call our Leasehold Enfranchisement & Management Services team today on 0113 207 0000.