Removing Ground Rent Terms 

The Competition and Markets Authority (CMA) has written to Taylor Wimpey and Countryside Properties after the regulator has said the housebuilders had broken consumer protection laws in relation to doubling ground rent. The terms that leaseholders had been obliged to sign up to were deemed “unfair” and have left homeowners feeling “trapped” as they cannot sell or mortgage their homes.

Ground rent is a fee that leaseholders pay to the owner of the land a house is situated on. The lease for the property will state how much ground rent is payable and when it must be paid within the year. Additionally, the lease will state whether and upon what terms the rent can be increased at any point throughout the term of the lease.

In their correspondence to the developers, the CMA outlined their concerns that these terms break consumer protection law. The developers have been required to remove contract terms which double ground rent every 10 or 15 years. Furthermore, they must agree not to use any doubling ground rent terms for any future leasehold contracts.  

The Signing of Formal Commitments

Taylor Wimpey and Countryside Properties must now agree to sign formal commitments known as ‘undertakings’ to remove these terms. Should they refuse to do so, they could face court action.

Taylor Wimpey state that it no longer sells leases with 10-year doubling ground rent clauses and in 2017 set up a financial assistance scheme to deal with converting leases, so that ground rent is linked to inflation instead. Countryside Properties has reportedly stated that they have not sold any properties with doubling ground rent clauses since 2017.   

The CMA launched their investigation into four housing developers last year. They found that leasehold homeowners were unfairly treated, and prospective buyers had been misled about purchasing new leasehold homes. Developers did not explain upfront to buyers what the financial impact would be when purchasing a leasehold house. The CMA is still investigating Barratt Developments and Persimmon Homes in relation to mis-selling of leasehold homes.

Here to Help

If you have any more questions or would like further information, you can contact our Real Estate Litigation Team on 0161 941 4000 or email The Real Estate Litigation Team.