UK: Leaseholders to get compensation after antitrust probe

Homeowners who were mis-sold leasehold properties may be able to get compensation after the competition watchdog announced it will investigate the issue, reported the Telegraph.

There are more than four million leasehold properties in England, of which 100,000 are considered to be “unfair,” according to lender Nationwide. In the worst cases the ground rent charged by the freeholder to the leaseholder doubles every 10 years.

The Competition and Markets Authority (CMA) vowed to start an investigation in the next few weeks.

Chair of the Committee, Clive Betts MP, had written to the CMA urging an investigation following evidence heard over the course of its inquiry into leasehold reform.

Betts commented, “The Housing, Communities and Local Government Committee report into leasehold laid bare a system in urgent need of reform, where homebuyers are vulnerable to exploitation by freeholders, developers and managing agents. Worse still, we heard extensive evidence from leaseholders regarding onerous ground rent terms, high and opaque service charges and one-off bills, unfair and excessive permission charges, and unreasonable costs to enfranchise or extend leases.”