Service charges and other issues
A guide to service charges, administration charges, ground rent, recognised tenants associations and forfeiture.
22nd December 2021
The Competition and Markets Authority (CMA) have been looking into the rent increases imposed by Taylor Wimpey and other developers. The effect of these increases, which kick in every 10 years, is that people often struggle to sell or obtain a mortgage on their home. In addition, these increases can often mean that the ground rent becomes unaffordable for the leaseholders.
The CMA have secured formal commitments from Taylor Wimpey to remove terms from leasehold contracts that cause ground rents to double in price. They have also agreed to remove terms that were originally doubling clauses but were amended so that the ground rent increased in line with the retail prices index (RPI) measure of inflation.
As a result of the CMA’s action, affected leaseholders’ ground rents will remain at the amount charged when they first bought their home and will not increase over time.
Taylor Wimpey has also confirmed to the CMA that it has stopped selling leasehold properties with doubling ground rent clauses.
In September 2020, the Competition and Markets Authority (CMA) launched enforcement action against 4 leading housing developers it believes may have broken consumer protection law in relation to leasehold homes. These included Countryside Properties and Taylor Wimpey, for using possibly unfair contract terms, and Barratt Developments and Persimmon Homes over the possible mis-selling of leasehold homes.
As part of this action, the CMA has already helped thousands of leaseholders by securing commitments from Countryside and Persimmon, as well as from an investor in freeholds, Aviva.
As part of its review of the leasehold sector, the CMA is continuing to investigate two 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 is also continuing.
For people who own, or are looking to buy, a leasehold property, the CMA has worked with LEASE to produce written and video guidance. The guidance offers advice on a number of issues, including what leaseholders can do if they are faced with fees or charges that they consider unjustified.
For more information on the CMA’s ongoing work in the sector and for future updates, visit the leasehold case page.
- CMA videos and guides for consumers who may own or be buying a leasehold property
- Competition & Markets Authority to investigate leasehold mis-selling
- Competition & Markets Authority launches consumer law investigation into leasehold market
- CMA requires Countryside and Taylor Wimpey to remove leasehold terms