CMA closes investigation into Countryside’s doubling ground rents

The Competition and Markets Authority has closed its investigation in Countryside’s doubling ground rents after the developer agreed to remove the clauses. The move comes after the CMA launched enforcement action against four housing developers in September 2020. These were Countryside and Taylor Wimpey, for using possibly unfair contract terms, and Barratt Developments and Persimmon Homes over the possible mis-selling of leasehold homes. The CMA has already secured commitments from Persimmon and Aviva as part of this action, helping thousands of leaseholders. Countryside said it had given voluntary undertakings to the CMA. CMA chief executive Andrea Coscelli said: “Leaseholders with Countryside can now breathe a sigh of relief knowing they will no longer be forced to pay these doubling ground rents. No one should feel like a prisoner in their home, trapped by terms that mean they can struggle to sell or mortgage their property.” Countryside said it will now “seek to remove all 10 and 15 yearly doubling clauses from leases” at no cost to the leaseholders, but only where the ground rent is not for the “ultimate benefit of a local authority or registered provider of social housing”. Where Countryside is not the freeholder, it said it would seek agreement with the owners of the freeholds to remove the doubling clause from each lease. Countryside said it expects to make a further provision of £5m for the ground rent assistance scheme, in addition to the £10m provision previously announced. Countryside said it had not sold any properties with doubling ground rent clauses since 2017 and asserted that it was not the subject of mis-selling allegations in the CMA’s investigation. Countryside chief executive, Iain McPherson, said: “Countryside has engaged extensively and constructively with the CMA throughout the course of its review to reach this positive outcome for affected leaseholders.” Coscelli said the CMA’s pursuit of the other housebuilders would continue. “We will continue to robustly tackle developers and investors – as we have done over the past 2 years – to make sure that people aren’t taken advantage of.” She added: “Other developers, such as Taylor Wimpey, and freehold investors now have the opportunity to do the right thing by their leaseholders and remove these problematic clauses from their contracts. “If they refuse, we stand ready to step in and take further action – through the courts if necessary.” Housing secretary Robert Jenrick said: “I strongly urge others to follow suit and end these historic practices.” As part of its review of the leasehold sector, the CMA is continuing to investigate investment groups Brigante Properties, and Abacus Land and Adriatic Land, after it wrote to the firms earlier this year setting out its concerns and requiring them to remove doubling ground rent terms from their contracts. The CMA’s investigation into Barratt Developments and Taylor Wimpey is also ongoing. To send feedback, e-mail piers.wehner@eg.co.uk or tweet @PiersWehner or @EGPropertyNews Photo: Countryside