Persimmon and Aviva amend leases after probe
Persimmon has made key commitments
Two property investors and developers have pledged to make their leasehold terms fairer, following an investigation by the Competition and Markets Authority.
Aviva has committed to remove certain terms from its leasehold contracts which cause ground rents to double, and Persimmon is set to offer leasehold house owners the opportunity to buy the freehold of their home at a discounted price.
Andrea Coscelli, chief executive of the CMA, commented: “This is a real win for thousands of leaseholders – for too long people have found themselves trapped in homes they can struggle to sell or been faced with unexpectedly high prices to buy their freehold. Now, they can breathe a sigh of relief knowing things are set to change for the better.
“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.”
The agreement brings to an end Persimmon’s involvement in the on-going CMA leasehold investigation.
Persimmon stopped selling leasehold houses in 2017 (other than in exceptional cases) and also introduced a Right to Buy scheme enabling customers with leasehold houses to buy their freehold at a price below market value.
The informal voluntary undertakings agreed today largely extend existing schemes Persimmon has in place and have been made without any admission of wrongdoing or liability.
Persimmon has voluntarily agreed to the following:
- An extension of its existing Right to Buy scheme to cap the purchase price of a freehold at £2,000. This extended scheme will apply to any house leases sold on or after 1 January 2000 and runs until 31 December 2026
- Customers who have already acquired their freeholds from Persimmon under the existing Right to Buy scheme, and who still own the freehold, can apply to be reimbursed for the difference between the price paid and £2,000
- An extension of its Reservation Period for home buyers from 35 days to 42 days.