The UK Competition and Markets Authority (CMA) has, this week, announced commitments from Persimmon and Aviva in connection with its ongoing investigation into the leasehold housing market which was opened 2 years ago.
The commitments will address concerns the CMA has raised in relation to the mis-selling of leases and, specifically, issues of doubling ground rents and those increasing in line with RPI and extending the right of enfranchisement (i.e. the “right to buy”) and fixing, and in some cases refunding, the purchase price for such right for tenants.
Whilst the CMA’s investigation is not part of Government’s policy of leasehold reform, it has been running in tandem and, similarly, takes aim at certain provisions which have been seemingly considered by Government to no longer be appropriate or reasonable in the leasehold market.
The impact of the CMA’s investigation, like Government’s broader leasehold policy reform, will likely be met with a mixed response across the market and it will be interesting to see how stakeholders will respond to, and manage, the issues of ground rents and enfranchisement, especially where there is no present focus by the CMA or prospective legislation.
This settlement ... is a hugely important step and demonstrates our commitment to support existing leaseholders who may have been mis-sold properties.