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Ground Rent: Victory For Leaseholders

Written by: Maryanne Bowring 15/09/2021
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Ground Rent: Win For Leaseholders

There is good news today for leaseholders living in homes developed by Countryside Properties. Following action taken by the Competition and Markets Authority, they will no longer be subjected to ground rents that double every 10 or 15 years. Instead, the CMA told the press today, leaseholders’ ground rents will no longer increase and will remain at the amount charged when they first bought their home.

This comes after Persimmon Homes offered leasehold house owners the opportunity to buy their freehold at a discounted price earlier in the year, following a long hard look at their sales practices by the CMA.

Countryside Properties has now made a commitment to remove the terms from its leasehold contracts that cause ground rents to double in price. And it’s about time. Doubling ground rents is not illegal but it is totally unfair on homeowners who, with the spectre of big increases hanging over them, often struggle to sell or mortgage their homes. Leaseholders can also find that their property rights are at risk if they fall behind on their rent.

The CMA is still investigating investment groups Brigante Properties, Abacus Land and Adriatic Land as well as looking into the contracts used by major housebuilders Barratt Developments and Taylor Wimpey.

So will other developers follow suit? We certainly hope so. We continue to argue the case for ground rents to be charged in the leasehold sector – at a reasonable, affordable and fair rate. The ability to raise these charges ensures continuing interest in developments by building owners and investors. However, there is no excuse for exploiting the public and we are glad to see the CMA showing its teeth.



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