Courts treat to four top builders

Watchdog says leasehold buyers have been misled

BUSINESS: Four of the country’s biggest housebuilders could risk court action if they do not commit to changing the way they do business, after the competition watchdog found evidence they had mistreated leasehold buyers.

The Competition and Markets Authority said that it has written to all four of the companies.

FOUR OF the country’s biggest housebuilders could risk court action if they do not commit to changing the way they do business, after the competition watchdog found evidence they had mistreated leasehold buyers.

The Competition and Markets Authority said that it has written to Barratt Developments, Countryside Properties, Persimmon Homes and Taylor Wimpey after uncovering “troubling evidence of potentially unfair terms”.

The regulator said that buyers may have been misled by developers, and been trapped into leaseholds with ground rents that double every decade.

“It is unacceptable for housing developers to mislead or take advantage of homebuyers. That’s why we’ve launched today’s enforcement action,” said CMA boss Andrea Coscelli.

A freeholder owns both the house and the land it is on, while a leaseholder rents the property for a fixed period – sometimes centuries.

The watchdog said it was taking action over the mis- selling of leaseholds.

It said that developers had not clearly explained what ground rent is and whether it increases over time to some buyers.

When buying a leasehold, rather than a freehold, buyers often have to pay a ground rent to the person or company who owns the freehold on the site.

But when potential buyers asked if they could become the freeholder, some were told the properties on an estate were only available as leasehold homes.

Barratt said: “The group is committed to putting its customers first and will continue to cooperate with the CMA whilst it completes its investigation.”

Taylor Wimpey said: “The

Itis unacceptable for developers to mislead or take advantage of homebuyers.

board takes this very seriously and Taylor Wimpey will continue to fully cooperate with the CMA, provide the further information to be requested by the CMA in the coming weeks and work with them to better understand their position.”

In a statement, York- based Persimmon said: “A proportion of our properties were sold on a leasehold basis in the past.

“Following consultation with government, stakeholders and customers we took the decision to stop selling leasehold houses where Persimmon owns the land freehold in 2017.

“Any customers of a Persimmon leasehold property in the last six years have been given the right to buy their lease at below market value and many have done so.”