‘Unacceptable’ leasehold terms – good news for leaseholders!

26 March 2021

Two major property developers, Taylor Wimpey and Countryside, have been ordered by the Competition and Markets Authority (CMA) to remove unfair contract terms that require leaseholders to pay ground rent that doubles every 10 to 15 years.

In their press release on 19th March 2021, the CMA have confirmed that they have written to Taylor Wimpey and Countryside demanding the removal of unfair ground rent terms from existing leasehold contracts and requiring that the companies undertake not to use the terms again in future leasehold agreements.

CMA Chief Executive Andrea Coscelli has said that:

“These ground rent terms can make it impossible for people to sell or get a mortgage on their homes, meaning they find themselves trapped. This is unacceptable. Countryside and Taylor Wimpey must entirely remove all these terms from existing contracts to make sure that they are on the right side of the law.”

 “If these developers do not address our concerns, we will take further action, including through the courts, if necessary.”

What’s all the fuss over ground rent?

If you have ever owned a leasehold property you will appreciate that they are a little more complicated than freehold property. A leasehold title is for a specified period of time, which can be as long as 999 years, after which, the property reverts to the freeholder (the outright owner). In addition to ground rent, leaseholders often have to pay service charges and other fees associated with making changes to their properties. Ground rent is traditionally a nominal annual rent that leaseholders are required to pay freeholders in respect of residential property.

However, in recent years, residential property developers have seen leasehold properties as an investment opportunity by increasing the ground rent and reducing the leasehold term to between 99 and 125 years. Some leaseholders, such as Taylor Wimpey and Countryside, have included provision in their contracts to double the ground rent every 10 to 15 years. This means that a leasehold title which initially incurs ground rent of £200 per year will incur ground rent of £6,400 per year by the time it has reached its 50th year. Whilst in the early years, these provisions went by mostly unnoticed, some lenders have started to reject mortgage applications where this type of term is included in the contracts due to it being too onerous. This means that many leaseholders have felt  trapped with a number of barriers in respect of selling their homes with the increasing costs. This has led the CMA to launch an investigation into potential unfair practices within the leasehold sector and escalating ground rents.

What do Taylor Wimpey and Countryside say?

Taylor Wimpey has said that it has stopped selling leases with terms that double the ground rent every 10 years on new developments from January 2012. In addition, they say they have set aside £130 million to cover the cost of amending leases so that any changes in the level of ground rent is linked to inflation instead.

A spokesperson for Countryside has said:

“Countryside has sold no properties with doubling ground rent clauses since 2017 and we introduced the Ground Rent Assistance Scheme in 2020 to assist leaseholders whose ground rents doubled more frequently than every 20 years”

 What should you do if you think you have been charged unfairly?

 The CMA have published detailed guidance on the Government website in relation to buying and owning a leasehold home, including what you should do if disputes arise. This guidance can be found by following the link below:


If you consider that a fee or charge is unfair then you should contact your freeholder or management company. It’s always good practice to keep a record of all correspondence whenever a dispute is raised.

If you are unable to resolve the dispute with the freeholder and require further legal advice, please do not hesitate to contact our dispute resolution team. Their details can be found here.

This article was written for Redkite Solicitors by Joshua Jones, a Legal Advisor within our Dispute Resolution Team. To find out more about Joshua visit his website profile here.

The contents of this article are intended for general information purposes only and shall not be deemed to be, or constitute legal advice. We cannot accept responsibility for any loss as a result of acts or omissions taken in respect of this article.