At least one property developer has included punitive doubling of rent clauses, and its recommended conveyancers failed to properly explain these clauses to some buyers, according to the report.
One Taylor Wimpey homeowner reportedly told Which? that six years after purchasing the home, she discovered her ground rent fee would double every decade.
It meant that between 2008 and 2058, the ground rent would leap from £295 to £9,440 a year.
The home in effect became unsellable after estate agents refused to market the property.
She had previously been informed by her conveyancer that ground rent would increase every 25 years.
The firm later blamed the wrong information on a “typographical error” according to Which?.
Homeowners left feeling ‘duped’
A trend for selling new-build houses on a leasehold basis has emerged in recent years, with an estimated four million properties in England alone.
Taylor Wimpey last year launched a redress scheme to amend leases so ground rent rises in line with Retail Price Inflation (RPI).
Some homeowners also said they had asked to purchase their freehold upfront but were discouraged by Taylor Wimpey staff, only to later find out it had been sold to a third party.
Which? also received complaints from homeowners whose freeholds had been sold on by other big developers.
Homeowners have been left feeling “powerless and duped”, Which? said.
Permission fees to improve homes
The Which ? investigation also found examples of homeowners being hit with unreasonable ‘permission fees’ from third-party freeholders to make improvements to their own homes.
Homeowners reported fees of as much as £2,500 to build a conservatory, £252 to own a pet, £60 to put up a doorbell, £300 to erect a fence and £108 just to make a request to alter their property.
Last year, the government promised to crackdown on unfair leasehold practices by banning the sale of almost all leasehold new build houses and making it cheaper for existing leaseholders to buy their freehold.
Gareth Shaw from Which? Money said: “We found families facing onerous clauses from developers, being badly advised by lawyers and hit with spiralling ground rents that effectively rendered their homes unsellable.
“In some cases they were ordered to pay extortionate retrospective permission fees under threat of losing their homes.
“We look forward to seeing firm action from the government to protect homeowners and ensure that no-one loses out as result of these unfair practices in the future.”
A spokesman for Taylor Wimpey said: “We listened to the concerns and difficulties that some of our customers were facing as a result of their doubling ground rent lease terms and have taken action to put it right.
“We were under no legal obligation to do this but we want to help our customers.
“In April 2017 we announced a voluntary scheme – the Ground Rent Review Assistance Scheme (GRRAS) – that is specifically aimed at addressing concerns that have been raised by some customers regarding affordability and how easy it is to sell or get a mortgage on properties with a ten-year doubling ground rent clause.
“We have now reached agreements with the freeholders who own the leases, to enable the significant majority of our customers with a 10-year doubling lease to convert their ground rent terms to an RPI-based structure, should the customer wish to do so.
“This will be done via a legal document called a Deed of Variation and if qualifying customers choose to proceed, Taylor Wimpey will both facilitate and cover the cost of the lease conversion on their behalf.
“These agreements address concerns about the saleability and mortgageability of these properties, by making the ground rents much more affordable. We are also in advanced discussions with freeholders who own the remaining small number of doubling leases.”
He added: “All our customers received independent professional legal advice from regulated legal firms when purchasing their property and signing their leases, the terms of which were outlined simply and clearly.
“We would expect all solicitors to explain all aspects of the transaction, including the ownership structure of a property and any rent reviews to their clients.
“We are unable to comment on the advice that any firm of solicitors has provided to its client as that is a confidential matter between them.
“Regarding the freehold sale, similar to all major housebuilders on developments where homes are sold on a leasehold basis, Taylor Wimpey has always sold its underlying freehold interests.
“This is because the administrative structures needed to manage a portfolio of freehold interests are very different to a housebuilder’s core business.
“We are unable to comment on verbal information provided to a customer in relation to their freehold at the point of sale.”