Watchdog forces action on leases Business

Investor Aviva and home builder Persimmon Homes have agreed to “historic” lease commitments as part of the UK competition watchdog’s investigation of unfair practices in the industry.

The Competition and Markets Authority (CMA) said that Aviva – which has invested in freehold properties from developers – has agreed to remove ground rent conditions considered unfair and reimburse landlords who saw the rents double.

Persimmon has also agreed to offer leasehold owners the option of purchasing full ownership of their property at a reduced price.

The AMC said the “historic commitments” would benefit thousands of tenants.

The CMA – which launched enforcement action against four real estate developers last September – has warned the wider industry to review its practices and said it has written to three other freehold investors asking them to remove the terms doubling of the ground rent of their contracts.

Andrea Coscelli, Managing Director of CMA, said: “This is a real victory for thousands of tenants – for too long people have found themselves trapped in homes they may find it difficult to sell. or have faced surprisingly high prices to purchase full ownership.

“Now they can breathe a sigh of relief knowing that things are going to change for the better.

“It’s good that Aviva and Persimmon have responded positively to this survey, helping to resolve these issues for tenants.

“But our job is not done. We now expect other real estate developers and investors to follow Aviva and Persimmon’s lead. Otherwise, they can expect legal action.”