24 2GM Saturday September 5 2020 | the times
News
Four of the biggest housebuilders face
the possibility of enforcement action by
the competition watchdog for allegedly
mis-selling leasehold homes.
The Competition and Markets
Authority (CMA) has found “troubling
evidence” that customers of Barratt,
Persimmon, Taylor Wimpey and
Countryside Properties may have been
misled into buying homes with onerous
or unfair terms.
The investigation could pave the way
for refunds if the watchdog orders the
companies to make legal commitments
to change their business practices.
Any buyers who were misled about
rising ground rents or the cost of buying
their freeholds may have their leases
withdrawn. Housebuilders that do not
co-operate may be taken to court. Yes-
terday the price of the companies’
shares fell by between 5 and 7 per cent.
The potential cases involve develop-
ers who may have failed to explain what
an annual ground rent was or how fast
it could rise. Some double every decade,
leaving leaseholders with large annual
bills and unsaleable homes.
The CMA found evidence that some
people were told that all properties on
an estate would be sold as leasehold,
when some where later sold as free-
holds. Others were told “the freehold
would cost only a small sum, but later
the price had increased by thousands of
pounds with little to no warning”. It also
uncovered unfair sales tactics such as
short deadlines to pressure buyers.
The inquiry received thousands of
emails from leaseholders who mostly
bought between 2003 and 2018, when
700,000 leasehold homes were built.RACHEL ADAMS/BNPSWatchdog targets builders
for mis-selling new homes
Andrea Coscelli, CMA chief
executive, said: “Everyone involved in
selling leasehold homes should take
note: if our investigation demonstrates
that there has been mis-selling or un-
fair contract terms, these will not be
tolerated.”
The CMA has written to the house-
builders outlining its concern and seek-
ing information. It said it should not be
assumed yet that any of the four com-
panies was involved in any or all of
these practices.
The Leasehold Knowledge Partner-
ship, a campaign group, claimed: “This
was abusive corporate behaviour on a
massive scale and it is utterly shameful
that professionals recommended by the
housebuilders — solicitors and valuers
— went along with it.”
Taylor Wimpey has set aside
£130 million and Countryside £10 mil-
lion to pay for changes to any leases.
Barratt, Taylor Wimpey and Coun-
tryside said that they would co-operate
with the CMA investigation.
Persimmon said: “Any customers of a
Persimmon leasehold property in the
last six years have been given the right
to buy their lease at below market value
and many have done so.”
The Home Builders Federation said:
“The industry has demonstrated a
commitment to address the issues
around leasehold property sales. We
will continue to engage with, and assist
the CMA.”Martina Lees Senior Property Writer
Little ships Philip Warren, 89, from Dorset, commands some of his fleet of 500
Royal Navy vessels, which he has spent 70 years building out of matchboxesCase study
J
oanne Darbyshire, 50, lived
in her Taylor Wimpey
leasehold house for six years
before realising in 2016 that it
would be impossible to sell. She
found out when a neighbour lost
a sale because the ground rent on
each home would double every
decade until it reached £9,440 a
year, unless they paid £50,000 to
buy out the lease. Mrs
Darbyshire paid £400,000 for the
house in Bolton in 2010, using a
solicitor recommended by Taylor
Wimpey. “The sales person just
told us we could buy the freehold
at any point for £5,000, but she
didn’t tell us they could sell it,
which they did [to a fund run by
Viscount Astor, David Cameron’s
brother-in-law].” Under a £130
million scheme set up by Taylor
Wimpey in 2017 the family is
converting to a ground rent that
rises in line with inflation.