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CMA finds “troubling” evidence of mis-selling in the leasehold housing sector

28 February 2020

The Competition and Markets Authority (CMA) is set to launch enforcement action against companies it believes have broken consumer protection law.

The CMA opened an investigation into the leasehold housing market in June 2019 and have today released its Update Report which states that the evidence it has found supports the case for changes to the law.

The investigation follows ongoing concerns regarding the fairness, clarity and presentation of some leasehold contract terms, which could lead to people being stung by costly fees over a long period or having to abide by onerous terms.

The CMA has found that home owners are having to pay escalating ground rents, which can double every ten years; and it has seen evidence that people are:

Andrea Coscelli, the CMA’s Chief Executive, said:

“We have found worrying evidence that people who buy leasehold properties are being misled and taken advantage of.

“Buying a home is one of the most important and expensive investments you can make, and once you’re living there you want to feel secure and happy. But for thousands of leasehold homeowners, this is not the case.

“We’ll be looking carefully at the problems we’ve found, which include escalating ground rents and misleading information, and will be taking our own enforcement action directly in the sector shortly.”

LEASE’s Chair, Wanda Goldwag, has welcomed the move saying:

“Customers have contacted us recently in despair feeling that they have been duped and missold in terms their home and their development. Therefore, we welcome the Competition and Markets Authority’s update report and its intent to launch direct enforcement action against companies it believes have broken consumer protection law. We will continue to support its work on leasehold, as we have previously, such as regards the managing agent market and Event Fees.”

CMA Press Release

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LEASE is governed by a board, appointed as individuals by the Secretary of State for the Ministry of Housing, Communities & Local Government.