Property developer Countryside Properties has agreed to buy back some of the freeholds it sold to investor E&J Estates.
The move comes amid government scrutiny of ground rents and practices in the sector.
A letter from E&J Estates to a leaseholder, seen by EYE, says: “Having confirmed that the lease upon which you hold your property contains such as doubling rent review clause, we have been working with Countryside to resolve the issue.
“As a consequence we have completed the sale of the freehold on your property back to Countryside.”
However, a spokesman for campaigners at the Leasehold Knowledge Partnership (LKP) said this had only been agreed on four to five sites, with others where ground rents double every 15 years excluded.
There has been a lot of focus on E&J Estates, which also said it would no longer purchase leaseholds with doubling ground rents, since the Government announced plans to reform leaseholds as it owns or administers approximately 50,000 primarily residential ground rent assets across the UK.
E&J Estates has also provided an update stating its support for reform and detailing how it is reviewing its own freeholds.
It said: “In June 2016 we launched a review of lease terms across our entire portfolio and found 1,961 leases, representing about 3.9% of the portfolio, had been drafted by developers to contain a 10-year doubling of ground rent.
“Since then we have been working hard to change all of these leases such that the ground rents will rise by no more than inflation. This has been a complex process.
“In respect of the 519 leases where the lease income is under our control, we have agreed amendments with 423 leases such that ground rents will not go up by more than inflation. We have contacted every other leaseholder affected and hope to have completed the changes shortly.
“In respect of the leases that we administer but where lease income is contracted to third parties, we are in advanced negotiations with counter-parties in order to change the lease terms such that ground rents will not go up by more than inflation, and expect to reach a conclusion in the coming weeks. We will then be contacting affected leaseholders to seek their consent to make these changes.”
A spokesman for Countryside Properties said: “Wherever possible, we sell properties on a freehold basis. Where we have to offer leasehold properties, we endeavour to make sure that they are affordable on both an initial and ongoing basis.
“Additionally, we have conducted a comprehensive review of properties we have sold on a leasehold basis and have concluded that the vast majority of these homes carry little or no financial risk to the occupier. However, for a small number of leases, we recognise that the 10 year doubling of ground rents increases too quickly and have taken action to address this issue.
“We welcome the Government consultation on leasehold reform and we will of course comply with all recommendations and legislation that comes from it going forward.”
Meanwhile, Taylor Wimpey is continuing to renegotiate terms of leaseholds with freeholders. It set aside £130m for this in April but home owners have complained about slow progress since.
As well as Taylor Wimpey, LKP said it was also awaiting an explanation of how Adriatic Land will resolve the situation around ground rents on its developments