The Competition and Markets Authority (CMA) launched an investigation to find out whether people are being treated fairly when buying their home or not. And the investigation was launched on June 11th.
Investigation into the matter started off with the leasehold scandal where around 100,000 buyers were trapped in leasehold clauses. But the doubling of ground rent after 10 years was a clause that remained hidden. And now when the buyers try to get out of the contracts, there is no way out, leading them to take lease claims or financial compensations.
This unfairness on the behalf of the freeholders made the government take a serious step. Now the government wants to investigate the fairness, clarity and presentation of some leasehold contract terms.
There are two important areas of the CMA investigation. One is the potential mis-selling of the leasehold property and the other is unfair terms on leasehold homes. The potential mis-selling of the leasehold property might include shady ground rent clauses and the doubtful practices around freehold purchases. And the unfair terms of the leasehold maybe about the excessive permission fees and service charges.
Currently CMA is investigating developers, lenders and freeholders. And It wants to gain more information on these issues and wants to make sure that customers aren’t misled by them. If by any case CMA finds that the buyers have been misled then it will take strict actions against them.
The leaseholders can also share their information to CMA. And let them decide the best course of action. Government now also prevents selling of newly built houses on leasehold and has also put a cap on the ground rent given the current situation.