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Persimmon and Aviva change position on leaseholds following competition watchdog investigation
Leaseholders of two major landowners will be given the right to purchase their properties’ freehold at a discount and will also be reimbursed for high ground rent fees as a result of an investigation by the Competition and Markets Authority (CMA).
Following an investigation launched by the watchdog last year, giant house builder Persimmon Homes has voluntarily agreed to offer leaseholders a refund on freeholds that were bought as far back as 1 January 2000.
Persimmon stopped selling leasehold houses in 2017 and introduced a scheme enabling customers with leasehold houses to buy their freehold at a price below market value.
The CMA said this measure addresses concerns that consumers were led to believe they could buy their freehold at a certain price, only to find out later that this price had increased by thousands of pounds with no warning. Those who have already bought their leasehold will be refunded, meaning they do not miss out.
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Persimmon said the measures have been introduced “without any admission of wrongdoing or liability”.
Group chief executive Dean Finch said: “Persimmon has not historically sold leasehold houses in high volumes and introduced a Right to Buy scheme for leaseholders in 2017.
“However, we are committed to putting our customers first and have voluntarily agreed to extend this existing support to provide further certainty and reassurance.”
At the same time, insurance giant Aviva has agreed to remove from leasehold contracts certain clauses which doubled ground rents payable by leaseholders every 10 to 15 years.
In March, the CMA urged Taylor Wimpey and Countryside Properties to remove similar clauses.
Aviva has also agreed to repay homeowners who were caught up in the ground rent scandal, which was uncovered in 2016.
A spokesperson for Aviva said the agreement relates to around 1,000 leases, representing just over 2% of those held by the fund.
The organisation added: “We are pleased to have agreed a solution that benefits affected leaseholders and will be contacting them to confirm the next steps.”
Andrea Coscelli, chief executive of the CMA, said: “This is a real win for thousands of leaseholders. For too long people have found themselves trapped in homes they can struggle to sell or been faced with unexpectedly high prices to buy their freehold.”
He added that the CMA expects other housing developers to follow suit or face legal action.
Housing secretary Robert Jenrick hailed the announcement as a “hugely important step” and highlighted new legislation introduced by the government to restrict ground rents in new leases to zero.
