Competition Markets Authority
Response to government consultation on ground rent cap and further undertakings accepted
Consultation response
13 March 2024: The CMA has responded to the Department for Levelling Up, Housing and Communities 2023 consultation Modern leasehold: restricting ground rent for existing leases. The CMA welcomes the consideration of further ground rent reforms by the government and continues to consider that statutory intervention may be necessary to protect consumers from ongoing problems associated with expensive ground rents.
- (13.3.24)
- Department for Levelling Up, Housing and Communities consulation page: Modern leasehold: restricting ground rent for existing leases
- Press notice: CMA frees hundreds more leaseholders from costly contract terms (13.3.24)
Further developments
13 March 2024: Since our last update, there has been further progress in relation to leases with less than 20-year doubling clauses. A further 3 freeholders with affected Taylor Wimpey leases have provided the CMA with undertakings for the benefit of leaseholders:
- (13.3.24)
- (13.3.24)
- (13.3.24)
An additional freeholder with affected Countryside leases has also now provided the CMA with undertakings to assist leaseholders:
- (13.3.24)
Other national developers, Redrow, Crest Nicholson, Miller Homes and Vistry have all worked with freeholders who purchased their affected leases to secure improvements for leaseholders:
- Adriatic Land 3 Limited (Redrow affected leases)
- Adriatic Land 3 and Abacus Land 4 Limited (Miller Homes affected leases)
- (13.3.24)
- (13.3.24)
We do not intend to open any new ground rent cases or cases related to the mis-selling of leasehold homes at this stage. However, existing cases remain open. We will consider next steps in those cases in light of the governments decision whether to cap ground rent.
Undertakings accepted from 9 more freeholders
24 August 2022: 9 more freeholders have committed to make changes for the benefit of leaseholders. This follows similar commitments given by Taylor Wimpey in December 2021.
The 9 freeholders had purchased Taylor Wimpey freeholds and have now given their commitment to remove clauses which caused the ground rents payable by leaseholders to double in price every 10 years.
Where applicable, the freeholders will also remove terms which were originally doubling clauses but were converted into RPI-based ground rent terms and will repay many homeowners who were affected by these doubling ground rent clauses. The ground rent for affected leaseholders will remain at the amount it was when the property was first sold and will not increase over time.
The CMA is also engaging with a further 4 national developers Crest Nicholson, Redrow, Miller Homes and Vistry who have agreed to make similar beneficial changes and/or to work with the companies who purchased their freeholds to remove doubling terms, as applicable.
Following our update on 18 March 2022, the CMA has now concluded its discussions with 2 remaining freeholders who had purchased Countryside leases. Freeholders D.A.T.S. (Holdings) Limited and Wallace Estates Limited have now both given similar commitments to make changes for the benefit of leaseholders.
Freeholder Undertakings (Taylor Wimpey Leases):
- (24.8.22)
- (24.8.22)
- (24.8.22)
- (24.8.22)
- (24.8.22)
- (24.8.22)
- (24.8.22)
- (24.8.22)
- (24.8.22)
- Press release: Thousands more leaseholders to get money back (24.8.22)
Freeholder Undertakings (Countryside Leases):
- (24.8.22)
- (24.8.22)
The CMA is in ongoing discussions with 5 remaining freeholders with affected Taylor Wimpey leases: Plaza 2 Surbiton Limited, Island Apartments Freehold Limited and Madison Close Freeholders Limited, who have agreed in principle to provide under