Mail wins pledge that watchdog will probe leasehold nightmare

FAMILIES who are trapped in homes on toxic leases have been given fresh hope after the competition watchdog pledged to launch an investigation.

In a victory for campaigners and the Daily Mail, the Competition and Markets Authority (CMA) said it would probe claims that thousands of families were mis-sold their properties.

As many as 100,000 households are thought to be stuck in homes on ‘onerous’ leases, with some forced to pay doubling ground rents or extortionate fees for minor changes to their property.

The CMA investigation could pave the way for these contracts to be overturned if they are found to contain unfair terms.

It could also leave developers exposed to legal action.

The move came after Housing Secretary James Brokenshire and the Commons housing committee called on the watchdog to look into the potential mis-selling of leaseholds. Mr Brokenshire has accused developers of presiding over a ‘culture of consumer exploitation’, while the committee said the scandal could be ‘the PPI of the housing industry’.

Yesterday, the National Leasehold Campaign said: ‘We are thrilled the CMA has listened to the housing committee’s concerns... and we hope this is the first of many of their recommendations to be implemented.’

Leaseholders effectively purchase the right to live in their property for an agreed period.

The contracts usually include obligations such as the payment of a ground rent to the freeholder. Such agreements were historically used for flats but, in recent years, developers controversially started selling leasehold houses as well.

The Mail has led the way in exposing the scandal, which has seen families trapped in homes rendered unsellable and unmortgageable because of the toxic clauses in their contracts. Some included doubling ground rents, and charges for permission to build conservatories or change carpets.

Many leaseholders have seen the freehold of their home sold to shadowy investment firms.

The Government banned the sale of new houses on leases in 2017.

In March, the Commons housing committee found many buyers were unaware of the differences between freehold and leasehold. MPs raised concerns about a lack of clarity for buyers and called on the CMA to investigate claims of mis-selling.

The CMA’s investigation is likely to put the sales tactics of developers under close scrutiny.

Housebuilders, including Taylor Wimpey and Persimmon, have insisted that the terms were explained to buyers.

The Home Builders Federation said: ‘We welcome the CMA investigation that should accurately set out the wider issues around leasehold and so help dispel some of the incorrect claims made. Leasehold remains a safe and secure tenure for millions of people.’

Thousands are trapped in homes they can’t sell From the Mail, April 8, 2017