In an agreement with the CMA, Persimmon will extend its Right to Buy scheme, capping the price of purchasing a freehold at £2,000. This will apply to any leases sold on or after January 1 2000, with the extension running until December 31 2026.
For those customers who have already purchased their freeholds from the housebuilder’s existing Right to Buy scheme – which allows leasehold buyers to purchase the freehold at below market value – they can be reimbursed for the difference between the price paid and £2,000. They must still own the freehold.
Under the agreement with CMA, Persimmon will also extend its reservation period for homebuyers from 35 days to 42 days.
Last September, the CMA launched enforcement action against Persimmon, Barratt Developments, Countryside and Taylor Wimpey relating to leasehold contracts and “potential mis-selling”.
In 2017, it emerged that some housebuilders had been selling houses as leasehold with onerous terms attached. Today (June 23) Persimmon said that it had stopped selling leasehold houses that year, introducing its Right to Buy initiative.
Persimmon stated: “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."
This ends CMA’s enforcement action on the company. But it is continuing to investigate the remaining three housebuilders.
Also under investigation was insurance firm Aviva, which has now agreed to remove certain clauses from leasehold contracts that allow ground rents to double for leaseholders.
The CMA has written to investment groups Brigante Properties and Abacus Land and Adriatic Land, asking them to remove doubling ground rent terms from their contracts.
Dean Finch, Persimmon’s group CEO, 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.”
Housing secretary Robert Jenrick, said: “The government asked the CMA to conduct this investigation – and I welcome their efforts to bring justice to homeowners affected by unfair practices, such as doubling ground rents, which have no place in our housing market.”
Jonathan Frankel, leasehold enfranchisement specialist from Cavendish Legal Group, says: “This is a welcome announcement, but much like the announcement at the start of the year by the Government on changes to leasehold rules, it is lacking in detail.
“The decision by Aviva and Persimmon should ensure other housebuilders follow suit, but the question is how long will homeowners have to wait before they see these words turned into action.
“As specialists in the area of leasehold enfranchisement, we would like to see just how, and particularly when, these two huge players will change their procedures to allow leaseholders to buy the freehold – and crucially, at what discount?
“Leaseholders feeling trapped by escalating ground rents and unsellable homes, deserve clarity and a timeframe for this, along with a clear commitment from the Government on when they will be implementing the changes announced in January.
“This may be the start of a journey to a fairer system for leaseholders, but I suspect there is still a long road ahead and it’s vital for leaseholders to get the right advice now.”
