Property developer Countryside Properties has agreed to scrap terms that saw ground rents double every 10 to 15 years, it has been announced.
The Competition and Markets Authority (CMA) said leaseholders can now “breath a sigh of relief” knowing they will not be unfairly charged.
According to the report, Countryside Properties included terms in leasehold contracts that caused ground rents to double in price every 10 to 15 years, meaning homeowners often struggled to sell or mortgage their property.
But the developer has now given formal commitments to the CMA to remove such terms from contracts.
The developer will also remove terms increasing ground rent in line with the Retail Prices Index (RPI), meaning ground rent will remain at the amount charged when leaseholders first bought their home.
Commenting on the announcement, Andrea Coscelli, Chief Executive of the CMA, said: “Leaseholders with Countryside can now breathe a sigh of relief knowing they will no longer be forced to pay these doubling ground rents.
“No one should feel like a prisoner in their home, trapped by terms that mean they can struggle to sell or mortgage their property. We will continue to robustly tackle developers and investors – as we have done over the past 2 years – to make sure that people aren’t taken advantage of.”
Former Housing Secretary Robert Jenrick added: “We asked the CMA to investigate the use of unfair practices in the housing market, such as doubling ground rents – and I welcome their continued success in bringing justice to homeowners.”
The news comes after property investor Aviva agreed to remove ground rent terms from its leasehold contracts, while property developer Persimmon Homes committed to offering leaseholders the opportunity to buy the freehold of their home at a discounted price.
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