The National Leasehold Campaign has welcomed yesterday’s update from the Competition & Markets Authority (CMA).

The not-for-profit organisation says the road to get to this point has been long, and progress slow, but they are pleased that the CMA have continued to work on this huge consumer issue.

The NLC has galvanised leaseholders to submit evidence to the CMA over many years.

Katie Kendrick, founder of the NLC, said: “Whilst the emphasis for the CMA investigation has focused on doubling ground rents it’s evident that the consumer champion also shares our significant concerns regarding RPI escalating ground rents.

“Escalating ground rents have led to leaseholders experiencing issues with selling and mortgaging properties resulting in them being trapped, unable to sell or move on with their lives. Putting consumers in an impossible situation”

The CMA in their response to Government Restricting Ground Rent Consultation stated: “At an RPI increase of 3.7% per annum over 20 years an RPI escalating clause produces an increase equivalent to a 20-year doubling clause.”

Jo Darbyshire, co-founder of NLC, predicted this issue back in 2018: “Make no mistake, RPI is not the solution to the Leasehold Scandal – We are just kicking the leasehold bomb down the road”.

“Every day sales are falling through on leasehold properties because of escalating ground rent. We urge the government to cap existing ground rents at a peppercorn. It is the only way to help consumers who have been exploited and taken advantage of for far too long”

In December 2010, Darbyshire bought a new build Taylor Wimpey home with a £295 ground rent that doubled every 10 years and despite having purchased her freehold after years of stress and escaping the leasehold nightmare herself she is frustrated by the glacial pace to convert 10-year doublers to a flat ground rent.

She explained: “It is now over two years since the developers and freeholders that created and bought the freeholds of the houses on my estate [Taylor Wimpey & Adriatic Land] agreed undertakings with the CMA to convert doublers and former doublers back to the original £295 ground rent. Government may think that this is all over but two years on from the CMA undertakings my neighbours are still paying high ground rents and I am incredibly frustrated by the lack of progress.

“The developers and freeholders need to convert these doublers to a flat ground rent, otherwise their warm words and undertakings are just empty rhetoric. Hundreds of leaseholders are caught up in this impasse.”

The CMA noted in their response to the government’s most recent consultation on ground rents: “Modern leasehold ground rents were neither legally necessary nor did we find any persuasive evidence that they were commercially necessary.”

Cath Williams, co-founder of the NLC, concurred: “We are at a crucial point in our campaign to help existing leaseholders who remain trapped. Whilst removing ground rents doesn’t solve all the issues with leasehold, it does help pave the way for Commonhold. The Ground Rents Bill 2022 banned future new build properties from having a ground rent, but in doing so created a two-tier market. This is the Government’s chance to do the right thing for consumers and set existing ground rents to a peppercorn.”

Katie Kendrick added: “If ground rents are wrong for the future, then they are wrong for the past and we urge the Government to support consumers and not those that have exploited the system and have the funds and connections to lobby politicians. Leaseholders will not stop campaigning for justice.”

CMA frees hundreds more leaseholders from costly contract terms