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CMA confirm evidence of mis-selling of leasehold homes
The Competition and Markets Authority has today confirmed that it has found “troubling” evidence of mis-selling of leasehold homes and it will be taking enforcement action. The CMA has found extensive evidence that buyers have been unfairly treated and misled by developers. However, it will not be confining its criticisms to the house builders and the new homes sector. All who are party to this will receive attention.
As long ago as 19th April 2017, IRPM was on Radio 4’s Money Box Live expressing disapproval over escalating ground rents, which can double every ten years, the rising costs of converting leaseholds to freeholds and ‘excessive and disproportionate fees’ for alterations and improvements.
CMA chief executive Andrea Coscelli said: “We have found worrying evidence that people who buy leasehold properties are being misled and taken advantage of.
“Buying a home is one of the most important and expensive investments you can make, and once you’re living there you want to feel secure and happy. But for thousands of leasehold home owners, this is not the case.
“We’ll be looking carefully at the problems we’ve found, which include escalating ground rents and misleading information, and will be taking our own enforcement action directly in the sector shortly.”
IRPM welcome the thrust of the report. Going further, the conveyancing process needs scrutiny; many of the buyers used the developers recommended conveyancing firms and, ultimately, buyers argue they were not told [in a way that was clear, so they understood the implications] what they were entering into.
IRPM is also pleased to see that the National Association of Estate Agents – Propertymark has welcomed the report. It is a fundamental principle under the Consumer Protection Regulations that buyers should be made aware of ‘all material information’ that might affect their ‘transactional decision’. The date of those regulations? 2008. As ever, the lack of enforcement in the sector is yet another reason why proper regulation of agents should happen sooner than later.
The CMA report can be found here… https://www.gov.uk/cma-cases/leasehold#investigation-launch