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Britain’s competition watchdog has declared a win for thousands of people caught up in the UK’s leasehold scandal.

The Competition and Markets Authority has secured formal commitments from investment group Aviva and housebuilder Persimmon that will help customers who bought homes on leasehold, rather than owning the freehold.

Aviva is one of several investment companies who bought freeholds from housebuilders.

Some leaseholds on new developments stated that ground rents would double every 10 years.

This left leaseholders trapped in spiralling ground rent contracts, making some homes unmortgageable, and leaving owners unable to move and facing hefty bills – prompting the government to bring forward reforms:

Aviva has agreed to remove controversial and unfair ground rent terms that saw the ground rents paid by leaseholders double every 10 or 15 years, and to repay those who have lost out through those rising ground rents.

The CMA explains:

  • Aviva will remove from leasehold contracts certain clauses which were doubling the ground rents payable by leaseholders. It will also remove terms which were originally doubling clauses and have been converted into RPI-based ground rent terms. Doubling clauses that cause ground rents to double every 10 to 15 years mean people can often struggle to sell or mortgage their homes. They can also affect leaseholders’ property rights. Where Aviva is the current freeholder, those leaseholders’ ground rents will revert to the original amount – i.e. when the property was first sold – and this will not increase over time.
  • Aviva has also agreed to repay homeowners who were affected by these doubling ground rent clauses. This means that, where ground rents had increased, people will be refunded the excess money they had paid over this time.

Persimmon Homes has agreed to allow leasehold house owners the opportunity to buy the freehold of their property at a discounted price capped at £2,000.

This addresses concerns raised by consumers with the CMA, and local Trading Standards, that they were led to believe they could buy their freehold at a certain price, only to find out later that this price had increased by thousands of pounds with no warning.

Persimmon, which stopped selling leasehold houses in 2017, has agreed to:

  • An extension of its existing Right to Buy scheme to cap the purchase price of a freehold at £2,000. This extended scheme will apply to any house leases sold on or after 1 January 2000 and runs until 31 December 2026;
  • Customers who have already acquired their freeholds from Persimmon under the existing Right to Buy scheme, and who still own the freehold, can apply to be reimbursed for the difference between the price paid and £2,000;

Henry Pryor
(@HenryPryor)

House builder @PersimmonHomes agrees to let anyone who purchased a long leasehold home since 2000 can buy freehold for max £2000. Deal with @CMAgovUK will also compensate those who have paid more. Expect others to follow rapidly. pic.twitter.com/p2gxmJxaHm


June 23, 2021

Persimmon is also extending its Reservation Period for home buyers from 35 days to 42 days.

Last year the CMA launched enforcement action involving Persimmon, Barratt Developments, Countryside Properties and Taylor Wimpey, into whether they had broken consumer protection law in relation to leasehold homes. It is also looking into other investment firms who have bought freeholds.

Today, it is urging other housebuilders and investors to follow Aviva and Persimmon’s lead.

Andrea Coscelli, Chief Executive of the CMA, said:


This is a real win for thousands of leaseholders – for too long people have found themselves trapped in homes they can struggle to sell or been faced with unexpectedly high prices to buy their freehold. Now, they can breathe a sigh of relief knowing things are set to change for the better.

It’s good that Aviva and Persimmon have responded positively to this investigation, enabling these issues to be fixed for leaseholders. But our work isn’t done. We now expect other housing developers and investors to follow the lead of Aviva and Persimmon. If not, they can expect to face legal action.

Also coming up today

Flash PMI surveys from businesses in the UK, Europe and the US will show whether the economic recovery is holding up this month.

The UK’s travel industry is holding a day of action to put pressure on the Government to reopen the sector and provide tailored financial support to businesses.

Events are planned outside the parliaments in London and Edinburgh, and in cities and airports around the UK.

Industry body Abta estimates that up to 195,000 jobs have been lost or are at risk within the UK travel industry, while a survey of members found more than half did not have enough money to survive more than three months in current conditions.

Pharmaceuticals group GlaxoSmithKline is holding a capital markets day, where chief executive Emma Walmsley will update investors on her plans to restructure the company into a pharmaceuticals-and-vaccines business, dubbed “New GSK”, and a consumer healthcare business.

It’s a crucial day for Walmsley, since New York-based Elliott Management took a multibillion-pound stake in GSK in April to push for change, with some investors concerned over slow progress with the drugs pipeline.

My colleague Julia Kollewe explains:


The head of Britain’s second-biggest drugmaker will present a 10-year outlook to shareholders and analysts, under pressure from an aggressive US hedge fund to demonstrate that she is the right person to lead the company beyond its breakup next summer.

The agenda

  • 9am BST: Eurozone flash purchasing managers index for services and manufacturing, June
  • 9.30am BST: UK flash PMI
  • Noon: US weekly mortgage applications
  • 3pm: US new home sales
  • 3pm BST: US flash PMI





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