Thousands of people who bought rental apartments from housing developer Countryside Properties will be released from expensive contract terms, according to a survey by The Competition and Marketing Authority.
The watchdog has examined the country’s and other property developers’ practice of doubling the land rent every ten to five years.
These increases, which are written into real estate agreements, mean that some homeowners struggle to sell or mortgage their homes, while their rights to their property can also be in danger if they fall behind on land rent payments.
Countryside Properties has now voluntarily given CMA formal commitments to remove terms from its leases that cause land rents to double.
The company will also remove terms from updated contracts which meant that the land rent increased in line with the higher retail price index for inflation. The land rent of the affected tenants will now remain at the amount charged when they bought their home and will not increase over time.
The countryside confirmed that it no longer sold rental properties with doubling land rental clauses.
The house builder Persimmon also agreed to offer rental properties to rent the opportunity to buy their property at a discounted price and to make repayments to any homeowners who bought their property.
Andrea Coscelli, CEO of CMA, said: “Tenants with rural areas can now breathe a sigh of relief and know that they will no longer be forced to pay these doubled land rents. No one should feel like a prisoner in their home, caught up in terms that mean they can struggle to sell or mortgage their property. ”
Coscelli urged Taylor Wimpey and other developers to “do the right thing for their tenants and remove these problematic clauses from their contracts”.
He added: “If they refuse, we are ready to go in and take further action – through courts if necessary.”
The countryside said it had not sold any properties with doubled land lease clauses since 2017. It added that it expected to set aside an additional £ 5 million to cover the ground rent assistance scheme, bringing its total provision for the system to £ 15 million.
Iain McPherson, Countryside’s CEO, said: “Countryside has worked extensively and constructively with CMA throughout its review to achieve this positive outcome for affected tenants.”