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Taylor Wimpey to remove doubling ground rent clauses after CMA action

  • 22/12/2021
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Taylor Wimpey to remove doubling ground rent clauses after CMA action
Housing developer, Taylor Wimpey, has voluntarily removed terms from its leasehold contracts that cause ground rents to double in price every 10 years after action from the Competition and Markets Authority (CMA).


Taylor Wimpey leaseholders will see their ground rents remain at the original amount, specifically when the property was first sold, and payments will not increase over time.

The developer confirmed to the CMA that it would stop selling leasehold properties with doubling ground rent clauses.

Taylor Wimpey will also remove terms which initially had the ground rent doubling but were converted to ground rent being increased in line with the retail prices index.

The CMA said that the doubling clauses were “unfair terms” and should be “fully removed” and “not replaced with another term that increases the ground rent”.

The impact of the increases is that people can often struggle to sell or obtain a mortgage on their home, and their property rights can also be at risk if they are unable to keep up with payments.

The CMA launched enforcement action in September last year on Countryside, Taylor Wimpey, Barratt Developments and Persimmon Homes concerning doubling ground rent clauses.

The action against Countrywide and Taylor Wimpey was regarding “possibly unfair contract terms”, whilst the action against Barratt Developments and Persimmon Homes was over the “possible mis-selling of leasehold homes”.

The regulator has secured commitments to change from Countryside and Persimmon, as well as freehold investor Aviva.

The investigation into Barratts Developments is still ongoing, according to the CMA.

It is also investigating investment groups Brigante Properties, Abacus Land and Adriatic Land about doubling ground rent terms in their contracts.

Andrea Coscelli, chief executive of the CMA, said: “This is a huge step forward for leaseholders with Taylor Wimpey, who will no longer be subject to doubling ground rents. These are totally unwarranted obligations that lead to people being trapped in their homes, struggling to sell or obtain a mortgage. I hope the news they will no longer be bound into these terms will bring them some cheer as we head into Christmas.

“Other developers and freehold investors should now do the right thing for homeowners 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.”

She added that this kind of issue could be “resolved at pace” and met with fines if the CMA receives consumer powers which are currently being consulted on by the government.

Secretary of State for Levelling Up, Housing and Communities Michael Gove said: “Unfair practices, such as doubling ground rents, have no place in our housing market – which is why we asked the CMA to investigate and I welcome their success in holding these major industry players to account.

“This settlement will help to free thousands more leaseholders from unreasonable ground rent increases and other developers with similar arrangements in place should beware, we are coming after you.”

He added that it would continue its work to protect and support all leaseholders and legislation to restrict ground rents in new leases to zero would stop unfair charges for future homeowners.

Taylor Wimpey was contacted for comment.

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