Aviva and Persimmon agree leasehold commitments with CMA
The Competition and Markets Authority said it has secured “landmark” commitments for leaseholders from Aviva and housebuilder Persimmon, on the back of its investigation into leasehold practices.
Persimmon said it agreed to a number of “voluntary informal undertakings”. These include capping the purchase price of a freehold at £2,000, in an extension of its existing Right to Buy scheme. This will apply to any house leases sold on or after 1 January 2000, and runs until 31 December 2026.
The housebuilder will also compensate customers who have already paid more for their freeholds, reimbursing them for the difference between the price paid and £2,000.
The Competition and Markets Authority said it has secured “landmark” commitments for leaseholders from Aviva and housebuilder Persimmon, on the back of its investigation into leasehold practices.
Persimmon said it agreed to a number of “voluntary informal undertakings”. These include capping the purchase price of a freehold at £2,000, in an extension of its existing Right to Buy scheme. This will apply to any house leases sold on or after 1 January 2000, and runs until 31 December 2026.
The housebuilder will also compensate customers who have already paid more for their freeholds, reimbursing them for the difference between the price paid and £2,000.
It will additionally extend the timeframe that prospective buyers are given to exchange contracts after reserving a property, to 42 days.
Aviva has committed to remove terms from its leasehold contracts that caused ground rents to double, including those converted into RPI-based ground rent terms.
Where it is the current freeholder, leaseholders’ ground rents will revert to the original amount at which the property was first sold, and this will not increase over time.
The firm has also agreed to repay homeowners affected by the ground rent clauses.
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 is good that Aviva and Persimmon have responded positively to this investigation, enabling these issues to be fixed for leaseholders. But our work is not 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.”
Dean Finch, group chief executive of Persimmon, said: “Building on our existing Right to Buy scheme, this agreement provides a fair deal for all leaseholders of Persimmon built houses, extending the opportunity to purchase their freehold at a price well below market value.
“Today’s agreement further demonstrates Persimmon’s determination to operate with integrity as we continue to build a business with a long-term, responsible and sustainable future.”
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