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Ground Rent refunds: Agents demand rest of industry must follow suit

NAEA Propertymark says the news that two major players in the leasehold sector have reformed their activities must be just the start of progress to resolve the controversy.

Housebuilder Persimmon will allow its leaseholders to buy the freehold of their property at a discount. And insurance company Aviva, which buys leaseholds from house builders, will repay homeowners who saw their ground rents double.

This follows a probe by the Competition and Markets Authority. 

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Mark Hayward, the National Association of Estate Agents’ chief policy adviser, says:“This is another positive step in remedying  the leasehold scandal that has impacted far too many people for so long. Leasehold house owners have lived with untold anxiety, knowing that their homes were essentially unsellable. 

“The CMA’s action will help those whose freeholds are with Aviva and Persimmon; other house developers and investors must now commit to make similar undertakings to ensure all leasehold house owners can move forward with their lives. 

“Our … research found that 57 per cent of leaseholders had no idea what buying a leasehold home meant until after they had gone through with the purchase and 94 per cent regret doing so.”

The CMA launched its investigation into leaseholds in 2019 because it was worried that leaseholders were facing vast and ever-rising charges for buying a freehold, or massive increases in ground rents.

It said the commitments by Persimmon and Aviva were a "real win” and CMA chief executive Andrea Coscelli expects other players to follow suit. 

"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.

"But our work isn't done. We now expect other housing developers and investors to follow the lead of Aviva and Persimmon. If not, they can expect to face legal action."

You can see more details of the CMA activities on this issue here.

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