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(Alliance News) - Persimmon PLC and Aviva PLC have committed to refund leasehold homeowners following an investigation into unfair terms and misselling, the UK Competition & Markets Authority said on Wednesday.
Persimmon will allow homeowners to buy the freehold of their home at a discount, while Aviva will remove certain clauses from leasehold contracts and repay those who were affected by them, the regulator said.
Shares in Persimmon were down 0.9% to 2,999.00 pence in London. Aviva shares were down 0.2% to 415.25p.
The CMA has been probing unfair leasehold contracts and potential misselling since June 2019. Some homeowners were forced to pay ground rents which doubled every ten years under the terms of the leasehold contracts, making it difficult to sell their homes.
Barratt Developments PLC, Countryside Properties PLC and Taylor Wimpey PLC are also being investigated.
Persimmon said all homeowners who have bought a leasehold property since 2000 will be allowed to buy their freehold, for a price capped at GBP2,000. The company also will reimburse customers who already bought their freehold for more than GBP2,000 under an existing scheme.
The housebuilder agreed to extend its reservation period, in which a buyer must exchange contracts after reserving a property, to 42 days from 35 days. The CMA had said that short deadlines put buyers under pressure.
Aviva, which buys leasehold contracts from housebuilders, has agreed to remove "doubling clauses" and refund those who were affected by them. It will also end ground rents that rise with inflation, meaning those rents will revert to their original price.
CMA Chief Executive Andrea Coscelli said: "It's good that Aviva and Persimmon have responded positively to this investigation, enabling these issues to be fixed for leaseholders. 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."
Persimmon Chief Executive Dean Finch said: "Persimmon has not historically sold leasehold houses in high volumes and introduced a right to buy scheme for leaseholders in 2017.
"However, we are committed to putting our customers first and have voluntarily agreed to extend this existing support to provide further certainty and reassurance."
By Ivan Edwards; ivanedwards@alliancenews.com
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