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Barratt Homes won’t face legal action over leasehold mis-selling claims

Written by: John Fitzsimons
The Competition and Markets Authority (CMA) has closed its investigation into potential mis-selling by Barratt Homes after concluding there was insufficient evidence.

The CMA launched its probe two years ago, as part of a wider investigation into potential failings in the leasehold market, looking at allegations of both mis-selling and unfair contract terms.

Barratt was suspected of mis-selling, with the CMA suggesting that some people who bought a leasehold property were not given the information they needed in order to fully understand their obligations, for example over areas like ground rent or their ability to purchase the freehold.

In a statement, the CMA said that the case had been closed after “careful scrutiny” of the evidence, having concluded that it was “insufficient to support a clear legal case for the CMA to secure collective redress for Barratt leaseholders”.

This, according to the CMA, was unlikely to change with further investigation, so it had opted to close the case.

The CMA also pointed out: “Barratt’s sales practices have changed, and they no longer sell leasehold houses.”

In a statement to the Stock Exchange Barratt welcomed the decision, noting that it had “worked constructively” with the CMA throughout the investigation.

Barratt added: “Barratt is committed to putting its customers first and has been awarded a five-star rating by its customers for 13 successive years, more than any other major housebuilder.”

While the Barratt element of the investigation has been dropped, the CMA said that it was “positively engaging” with firms who had purchased freeholds from fellow builder Taylor Wimpey, in a bid to get them to remove clauses in the leases which would see ground rent doubled periodically for leaseholders.

Similar agreements have already been secured with more than a dozen other freeholder businesses.

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