Thousands of homeowners sold onerous ground rent leases when they bought a new house are to receive refunds after pressure from the Competition watchdog.
Nine companies that bought leases from leading housing developer Taylor Wimpey have agreed to return money, said the CMA, while four other major builders - Crest Nicholson, Redrow, Miller Homes and Vistry – have also agreed to work with the companies who purchased their freeholds to remove doubling terms.
The move will see over 5,000 households throughout the UK receiving a refund and take the total number of buyers released from lease obligations to 20,000, the watchdog added.
Householders with the problem leases saw their ground rent double every ten years and in some cases could keep on rising to more than their mortgage payments.
Buyers said the terms of the ground leases made their homes unsaleable or impossible to remortgage.
Sarah Cardell, interim CEO of the CMA, which launched its investigation in 2019, said: "For years leaseholders have been plagued by what we believe are unfair practices.
“That’s why we sought to tackle the problem by launching action against some of the biggest names in the business.
“As a result of our work, over 20,000 people now have a new lease of life, freed from issues like costly doubling ground rent terms.”
Earlier this year, the CMA dropped an investigation into mis-selling against Barratt Developments due to insufficient evidence, though it carried on its probe into leases sold by Taylor Wimpey.
In its statement today, the CMA said that the nine firms that bought leases from Taylor Wimpey had agreed to remove any problematic contract terms
“The firms will also remove contract terms which were originally doubling clauses, but were converted so the ground rent increased in line with the Retail Price Index (RPI).”
All affected leaseholders will now see their ground rents remain at the original amount.
The CMA added that all of the undertakings were given voluntarily by the companies involved with no admission of any wrongdoing or liability.
Shares in Taylor Wimpey eased 2.7% to 110p.