A major crackdown on property developers by the competition watchdog has been welcomed by the housing industry as it should go along way towards ‘remedying the leasehold scandal’.

The Competition and Markets Authority (CMA) uncovered what has been described as “troubling evidence” that leasehold homeowners and prospective buyers were overcharged and misled by the UK’s biggest housebuilders.

Thousands of leaseholders will now be refunded unfair ground rents and allowed to buy the freehold of their property at a discounted price, while Persimmon Homes and Aviva have agreed to offer the refunds.

Aviva, an insurance group that bought freeholds from developers, has agreed to remove ground rent terms that are considered unfair and repay homeowners whose rents doubled.

Persimmon has agreed to offer leasehold homeowners the opportunity to buy the freehold of their property at a discounted price, and will make repayments to some homeowners who have bought their freeholds.

Andrea Coscelli, chief executive of the CMA, said: “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 government asked the CMA to conduct this investigation – and it now welcomes their efforts to bring justice to homeowners affected by unfair practices, such as doubling ground rents, which have no place in our housing market, according to housing secretary Robert Jenrick.

He commented: “This settlement with Aviva and Persimmon is a hugely important step and demonstrates our commitment to support existing leaseholders who may have been mis-sold properties.

“We have also introduced new legislation that will protect future homeowners by restricting ground rents in new leases to zero and I would strongly urge other developers to follow suit in amending their historic practices.

“The CMA has also written to the investment groups Brigante Properties, and Abacus Land and Adriatic Land, setting out its concerns and requiring them to remove doubling ground rent terms from their contracts. They now have the opportunity to respond to the CMA’s detailed concerns and avoid court action by signing undertakings to remove such terms.”

Mark Hayward, chief policy adviser at Propertymark, welcomed the CMA’s announcement about its ongoing work to tackle issues in the leasehold sector.

He said: “This is another positive step in remedying  the leasehold scandal that has impacted far too many people for so long. Leasehold house owners have lived with untold anxiety, knowing that their homes were essentially unsellable.

“The CMA’s action will help those whose freeholds are with Aviva and Persimmon; other house developers and investors must now commit to make similar undertakings to ensure all leasehold house owners can move forward with their lives.

“Our Leasehold: A Life Sentence research found that 57% of leaseholders had no idea what buying a leasehold home meant until after they had gone through with the purchase and 94% regret doing so.”