Buy To Let
Taylor Wimpey leaseholders to get ground rent refunds
The Competition and Markets Authority (CMA) has ordered nine companies that bought freeholds from Taylor Wimpey to refund the cash. Those leaseholders who have already paid doubling ground rents will receive refunds.
The nine firms are:
- BDP Freehold Limited
- Mortgage Incentive Funds Limited
- The Bridges (Darlington) Management Company Limited
- Bessant Properties Limited
- Brigante Properties Limited
- Furatto Limited and Long Term Reversions No 1 Limited
- SF Ground Rents No 18 Limited, SF Ground Rents No 15 Limited and RMB 102 Limited
- Sarum Properties Limited
- Taylor Court Limited
All nine firms that bought freeholds from Taylor Wimpey must now remove problematic contract terms that cause ground rents to double in price every 10 years. These terms can lead to people being trapped in homes they cannot sell or mortgage.
The firms will also remove contract terms which were originally doubling clauses, but were converted so the ground rent increased in line with the Retail Price Index (RPI) instead.
The CMA believes that the original doubling clauses were unfair and should therefore have been fully removed – not replaced with another term that still increases the rent.
The CMA is still working with a further five firms that bought freeholds from Taylor Wimpey. It’s yet to reach agreements with Island Apartments Freehold Limited, Madison Close Freeholders Limited, Elmdon Real Estate LLP, Abacus Land 1 (Holdco 1) Limited, Abacus Land 4 Limited and Adriatic Land 1 (GR3) Limited (part of the Abacus Land and Adriatic Land investment group), and Plaza 2 Surbiton Limited.
The CMA has also told housebuilders Crest Nicholson, Redrow, Miller Homes and Vistry to work with the companies who purchased their freeholds to remove doubling terms.
This action brings the total number of homeowners that have benefitted from the CMA’s investigation into ground rents to more than 20,000.
All affected leaseholders will now see their ground rents remain at the original amount when the property was first sold, and this will not increase over time.
Sarah Cardell, CMA interim chief executive, said: “For years leaseholders have been plagued by what we believe are unfair practices. That’s why we sought to tackle the problem by launching action against some of the biggest names in the business.
“As a result of our work, over 20,000 people now have a new lease of life, freed from issues like costly doubling ground rent terms.”
Since 2019, the CMA has sought to tackle issues around the possible mis-selling of leasehold homes and contract terms it believes are unfair. Its investigations involving seven leading housing developers – and businesses who purchased freeholds from these firms – have led to several changes.
In March, 15 businesses which bought freeholds from Countryside were ordered to remove doubling ground rent terms, while in December 2021 Taylor Wimpey was told to remove doubling ground rent terms, and RPI-based terms that were originally doublers, from all its contracts.
Last year also saw Countryside Properties forced to remove doubling ground rent terms in the freeholds it owns. In June 2021, Persimmon was ordered to sell leasehold houseowners their freeholds at a price similar to what they expected when they bought their home, rather than the inflated prices later quoted.