Back in September last year The Competition and Markets Authority launched enforcement action against 4 of the biggest UK based housing developers.


Barratt, Countryside Properties, Permission Homes and Taylor Wimpey are all being carefully investigated by the CMA after they uncovered worrying evidence that leasehold properties may have been mis-sold to homeowners. The CMA is concerned these 4 developers have been mis-leading buyers about unfair contract terms. In March Taylor Wimpy and Countryside Properties were told to change their contracts which forced people to pay increasing ground rents. These people often signed up to contracts but did not know the rents would increase or that leases could be extended without their knowledge.


The issue has been highlighted again this week as a woman has brought her conveyancing firm to court over what she says was a failure on their behalf to inform her of the incremental increases in ground rent on her property. She is pursuing a negligence claim against the firm who failed to inform her of this information and because of this her property is unsellable.


Carol Patterson said: “I just feel so frustrated that something I worked so hard for and saved for has no value at all now. I bought this flat as an investment for my pension. The ground rent for Buckingham Palace wouldn’t be as much as what I would be paying at the end of my lease.”


The Competition and Markets Authority have said they are looking into the following areas in relation to the selling of properties and mis-leading buyers:

Ground rents: developers failing to explain clearly exactly what ground rent is, whether it increases over time, when increases will occur and by how much.

Availability of freehold: people being misled about the availability of freehold properties. For example, the CMA found evidence that some people were told properties on an estate would only be sold as leasehold homes, when they were in fact later sold as freeholds to other buyers.

Cost of the freehold: people being misled about the cost of converting their leasehold to freehold ownership. When buying their home, the CMA found evidence that some people were told the freehold would cost only a small sum, but later down the line the price had increased by thousands of pounds with little to no warning.

Unfair sales tactics: developers using unfair sales tactics – such as unnecessarily short deadlines to complete purchases – to secure a deal, meaning people could feel pressured and rushed into buying properties that they may not have purchased had they been given more time.

Unfair contract terms – ground rents

The use of unfair contract terms that mean homeowners have to pay escalating ground rents, which in some cases can double every 10 years. This increase is built into contracts, meaning people can also struggle to sell their homes and find themselves trapped.

The CMA will publish their findings once the investigation is complete and all the parties mentioned have had time to respond to complaints. If it is found companies have been mis-selling homes with unfair contracts, it could open the doors for a flurry of complaints against developers.

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