Persimmon and Aviva homes embroiled in overcharging scandal.
Both homebuilders must issue a refund to their leaseholders.
Thousands of leaseholders will be reimbursed for unfair land rents and allowed to buy freehold in their property at a discounted price after the competition regulator’s crackdown on developers.
Persimmon Homes and Aviva agreed to offer the rebates after the Competition and Markets Authority (CMA) discovered “troubling evidence” that rental homeowners and prospective buyers were overcharged and misled by the most prominent developers in UK homes.
Activists described the new commitments as “life-changing” and a “massive milestone” in the battle to ensure fair treatment for property buyers. They called on other developers and homeowners to do the same.
Aviva, an insurance group that bought freeholds from the developers, agreed to eliminate the rental terms of the land that are considered unfair and to reimburse owners whose rents doubled.
“Persimmon Homes has committed a heinous crime against its leaseholders.”
Persimmon has agreed to offer rental homeowners the opportunity to purchase freehold ownership of their property at a discounted price. In addition, it will make refunds to some homeowners who have purchased their properties.
Dean Finch, CEO of Persimmon, said the company would expand its right-to-buy scheme to limit the purchase price of a freehold to £ 2,000 for any home lease sold from January 1, 2000, to the end of 2026.
He added that buyers who had already acquired their freehold from Persimmon under the existing scheme and who still owned the freehold could request a refund of the difference between the price paid and £ 2,000.
The homebuilder also agreed to extend the period potential buyers are given to exchange contracts after reserving a property out of concern that a short time limit could pressure buyers to make a purchase that they would not do if they were given more time to consider.
Aviva said it would contact about 1,000 tenants to confirm the next steps.
The watchdog’s investigation into unfair leases found in October that rental homeowners and prospective buyers were being “caught” by developers offering misleading terms and charging excessive fees.
The CMA identified several cases of abuse, including homeowners having to pay increasing land rents, which in some cases were planned to double every ten years, leaving people struggling to sell their homes. In addition, some prospective rental home buyers had been misleadingly told that it would be cheap to convert a lease into a freehold, only to find that the cost had risen by thousands of pounds, with little to no warning.
“Another massive milestone,” the National Leasing Campaign said in a comment posted on Twitter. “Persimmon & Aviva have finally done the right thing, at last. Now other free developers and owners must follow.”
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